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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the petitioner of the case. The petitioner is the party who petitioned the Supreme Court to review the case. This party is variously known as the petitioner or the appellant. Characterize the petitioner as the Court's opinion identifies them.
Identify the petitioner by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the petitioner is actually single entity or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single petitioner, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
NEW HAMPSHIRE v. MAINE
No. 130, Orig.
Argued April 16,2001
Decided May 29, 2001
Paul R Stern, Deputy Attorney General of Maine, argued the cause for defendant. With Mm on the briefs were An drew Ketterer, Attorney General, and Christopher C. Taub and William R. Stokes, Assistant Attorneys General.
Jeffrey P. Minear argued the cause for the United States as amicus curiae. With him on the brief were former So He-itor General Waccman, Assistant. Attorney General Schiffer, Deputy Solicitor General Kneedler, and Patricia Weiss.
Leslie J. Ludtke, Associate Attorney General of New Hampshire, argued the cause for plaintiff With her on the briefs were Phillip T. McLaughlin, Attorney General, and John R. Harrington.
Justice Ginsburg
delivered the opinion of the Court.
The Piscataqua River lies at the southeastern end of New Hampshire’s boundary with Maine. The river begins at the headwaters of Salmon Falls and runs seaward into Portsmouth Harbor (also known as' Piscataqua Harbor). On March 6, 2000, New Hampshire brought this original action against Maine, claiming that the Piscataqua River boundary runs along the Maine shore and that the entire river and all of Portsmouth Harbor belong to New Hampshire. Maine has filed a motion to dismiss on the ground that two prior proceedings — a 1740 boundary determination by King George II and a 1977 consent judgment entered by this Court — definitively fixed the Piscataqua River boundary at the middle of the river’s main channel of navigation.
The 1740 decree located the Piscataqua River boundary at the “Middle of the River.” Because New Hampshire, in the 1977 proceeding, agreed without reservation that the words “Middle of the River” mean the middle of the Pis-cataqua River’s main channel of navigation, we conclude that New Hampshire is estopped from asserting now that the boundary runs along the Maine shore. Accordingly, we grant Maine’s motion to dismiss the complaint.
I
New Hampshire and Maine share a border that runs from northwest to southeast. At the southeastern end of the border, the easternmost point of New Hampshire meets the southernmost point of Maine. The boundary in this region follows the Piscataqua River eastward into Portsmouth Harbor and, from there, extends in a southeasterly direction into the sea. Twenty-five years ago, in a dispute between the two States over lobster fishing rights, this Court entered a consent judgment fixing the precise location of the “lateral marine boundary,” i. e., the boundary in the marine waters off the coast of New Hampshire and Maine, from the closing line of Portsmouth Harbor five miles seaward to Gosport Harbor in the Isles of Shoals. New Hampshire v. Maine, 426 U. S. 363 (1976); New Hampshire v. Maine, 434 U.S. 1, 2 (1977). This ease concerns the location of the Maine-New Hampshire boundary along the inland stretch of the Pis-cataqua River, from the mouth of Portsmouth Harbor westward to the river’s headwaters at Salmon Falls. (A map of the region appears as an appendix to this opinion.)
In the 1970’s contest over the lateral marine boundary, we summarized the history of the interstate boundary in the Piscataqua River region. See New Hampshire v. Maine, 426 U.S., at 366-367. The boundary, we said, “was in fact fixed in 1740 by decree of Ring George II of England” as follows:
“‘That the Dividing Line shall pass up thro the Mouth of Piscataqua Harbour and up the Middle of the River .... And that the Dividing Line shall part the Isles of Shoals and run thro the Middle of the Har-bour between the Islands to the Sea on the Southerly Side....’ ” Id., at 366 (quoting the 1740 decree).
In 1976, New Hampshire and Maine “expressly agree[d] . . . that the decree of 1740 fixed the boundary in the Pis-cataqua Harbor area.” Id., at 367 (internal quotation marks omitted). “Their quarrel was over the location ... of the ‘Mouth of Piscataqua River,’ ‘Middle of the River,’ and ‘Middle of the Harbour’ within the contemplation of the decree.” Ibid. The meaning of those terms was essential to delineating the lateral marine boundary. See Report of Special Master, O. T. 1975, No. 64 Orig., pp. 32-49 (hereinafter Report). In particular, the northern end of the lateral marine boundary required a determination of the point where the line marking the “Middle of the [Piseataqua] River” crosses the closing line of Piseataqua Harbor. Id., at 43.
In the course of litigation, New Hampshire and Maine proposed a consent decree in which they agreed, inter alia, that the words “Middle of the River” in the 1740 decree refer to the middle of the Piseataqua River’s main channel of navigation. Motion for Entry of Judgment By Consent of Plaintiff and Defendant in New Hampshire v. Maine, O. T. 1973, No. 64 Orig., p. 2 (hereinafter Motion for Consent Judgment). The Special Master, upon reviewing pertinent history, rejected the States’ interpretation and concluded that “the geographic middle of the river and not its main or navigable channel was intended by the 1740 decree.” Report 41. This Court determined, however, that the States’ interpretation “reasonably invested] imprecise terms” with a definition not “wholly contrary to relevant evidence.” New Hampshire v. Maine, 426 U.S., at 369. On that basis, the Court declined to adopt the Special Master’s construction of “Middle of the River” and directed entry of the consent decree. Id., at 369-370. The final decree, entered in 1977, defined “Middle of the River” as “the middle of the main channel of navigation of the Piseataqua River.” New Hampshire v. Maine, 434 U.S., at 2.
The 1977 consent judgment fixed only the lateral marine boundary and not the inland Piseataqua River boundary. See Report 42-43 (“For the purposes of the present dispute, ... it is unnecessary to lay out fully the course of the boundary as it proceeds upriver ....”). In the instant action, New Hampshire contends that the inland river boundary “run[s] along the low water mark on the Maine shore,” Complaint 49, and asserts sovereignty over the entire river and all of Portsmouth Harbor, including the Portsmouth Naval Shipyard on Seavey Island located within the harbor just south of Kittery, Maine, id., at 34. Relying on various historical records, New Hampshire urges that “Middle of the River,” as those words were used in 1740, denotes the main branch of the river, not a midchannel boundary, Brief in Opposition to Motion to Dismiss 12-16, and that New Hampshire, not Maine, exercised sole jurisdiction over shipping and military activities in Portsmouth Harbor during the decades before and after the 1740 decree, id., at 17-19, and nn. 35-38.
While disagreeing with New Hampshire’s understanding of history, see Motion to Dismiss 9-14,18-19 (compiling evidence that Maine continually exercised jurisdiction over the harbor and shipyard from the 1700’s to the present day), Maine primarily contends that the 1740 decree and the 1977 consent judgment divided the Piseataqua River at the middle of the main channel of navigation — a division that places Seavey Island within Maine’s jurisdiction. Those earlier proceedings, according to Maine, bar New Hampshire’s complaint under principles of claim and issue preclusion as well as judicial estoppel.
We pretermit the States’ competing historical claims along with their arguments on the application vel non of the res judicata doctrines commonly called claim and issue preclusion. Claim preclusion generally refers to the effect of a prior judgment in foreclosing successive litigation of the very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit. Issue preclusion generally refers to the effect of a prior judgment in foreclosing successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment, whether or not the issue arises on the same or a different claim. See Restatement (Second) of Judgments §§ 17, 27, pp. 148, 250 (1980); D. Shapiro, Civil Procedure: Preclusion in Civil Actions 32, 46 (2001). In the unusual circumstances this case presents, we conclude that a discrete doctrine, judicial estoppel, best fits the controversy. Under that doctrine, we hold, New Hampshire is equitably barred from asserting — contrary to its position in the 1970’s litigation — that the inland Piscataqua River boundary runs along the Maine shore.
II
“[W]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him.” Davis v. Wakelee, 156 U.S. 680, 689 (1895). This rule, known as judicial estoppel, “generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.” Pegram v. Herdrich, 530 U.S. 211, 227, n. 8 (2000); see 18 Moore’s Federal Practice §134.30, p. 134-62 (3d ed. 2000) (“The doetrine of judicial estoppel prevents a party from asserting a claim in a legal proceeding that is inconsistent with a claim taken by that party in a previous proceeding”); 18 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §4477, p.782 (1981) (hereinafter Wright) (“absent any good explanation, a party should not be allowed to gain an advantage by litigation on one theory, and then seek an inconsistent advantage by pursuing an incompatible theory”).
Although we have not had occasion to discuss the doctrine elaborately, other courts have uniformly recognized that its purpose is “to protect the integrity of the judicial process,” Edwards v. Aetna Life Ins. Co., 690 F. 2d 595, 598 (CA6 1982), by “prohibiting parties from deliberately changing positions according to the exigencies of the moment,” United States v. McCaskey, 9 F. 3d 368, 378 (CA5 1993). See In re Cassidy, 892 F. 2d 637, 641 (CA7 1990) (“Judicial estoppel is a doctrine intended to prevent the perversion of the judicial process.”); Allen v. Zurich Ins. Co., 667 F. 2d 1162, 1166 (CA4 1982) (judicial estoppel “proteet[s] the essential integrity of the judicial process”); Scarano v. Central R. Co., 203 F. 2d 510, 513 (CA3 1953) (judicial estoppel prevents parties from “playing ‘fast and loose with the courts’ ” (quoting Stretch v. Watson, 6 N. J. Super. 456, 469, 69 A. 2d 596, 603 (1949))). Because the rule is intended to prevent “improper use of judicial machinery,” Konstantinidis v. Chen, 626 F. 2d 933, 938 (CADC 1980), judicial estoppel “is an equitable doctrine invoked by a court at its discretion,” Russell v. Rolfs, 893 F. 2d 1033, 1037 (CA9 1990) (internal quotation marks and citation omitted).
Courts have observed that “[t]he circumstances under which judicial estoppel may appropriately be invoked are probably not reducible to any general formulation of principle,” Allen, 667 F. 2d, at 1166; accord, Lowery v. Stovall, 92 F. 3d 219, 223 (CA4 1996); Patriot Cinemas, Inc. v. General Cinema Corp., 834 F. 2d 208, 212 (CAl 1987). Nevertheless, several factors typically inform the decision whether to apply the doctrine in a particular case: First, a party’s later position must be “clearly inconsistent” with its earlier position. United States v. Hook, 195 F. 3d 299, 306 (CA7 1999); In re Coastal Plains, Inc., 179 F. 3d 197, 206 (CA5 1999); Hossaini v. Western Mo. Medical Center, 140 F. 3d 1140, 1143 (CA8 1998); Maharaj v. Bankamerica Corp., 128 F. 3d 94, 98 (CA2 1997). Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party’s earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would ereate “the perception that either the first or the second court was misled,” Edwards, 690 F. 2d, at 599. Absent sue-cess in a prior proceeding, a party’s later inconsistent position introduces no “risk of inconsistent court determinations,” United States v. C. I. T. Constr. Inc., 944 F. 2d 253, 259 (CA5 1991), and thus poses little threat to judicial integrity. See Hook, 195 F. 3d, at 306; Maharaj, 128 F. 3d, at 98; Konstantinidis, 626 F. 2d, at 939. A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. See Davis, 156 U.S., at 689; Philadelphia, W., & B. R. Co. v. Howard, 13 How. 307, 335-337 (1852); Scarano, 203 F. 2d, at 513 (judicial estoppel forbids use of “intentional self-contradiction ... as a means of obtaining unfair advantage”); see also 18 Wright §4477, p.782.
In enumerating these factors, we do not establish inflexible prerequisites or an exhaustive formula for determining the applicability of judicial estoppel. Additional considerations may inform the doctrine’s application in specific factual contexts. In this case, we simply observe that the factors above firmly tip the balance of equities in favor of barring New Hampshire’s present complaint.
New Hampshire’s claim that the Piseataqua River boundary runs along the Maine shore is clearly inconsistent with its interpretation of the words “Middle of the River” during the 1970’s litigation. As mentioned above, supra, at 747, interpretation of those words was “necessary” to fixing the northern endpoint of the lateral marine boundary, Report 43. New Hampshire offered two interpretations in the earlier proceeding — first agreeing with Maine in the proposed consent decree that “Middle of the River” means the middle of the main channel of navigation, and later agreeing with the Special Master that the words mean the geographic middle of the river. Both constructions located the “Middle of the River” somewhere other than the Maine shore of the Pis-eataqua River.
Moreover, the record of the 1970’s dispute makes clear that this Court accepted New Hampshire’s agreement with Maine that “Middle of the River” means middle of the main navigable channel, and that New Hampshire benefited from that interpretation. New Hampshire, it is true, preferred the interpretation of “Middle of the River” in the Special Master’s report. See Exceptions and Brief for Plaintiff in New Hampshire v. Maine, O. T. 1975, No. 64 Grig., p. 3 (hereinafter Plaintiff’s Exceptions) (“the boundary now proposed by the Special Master is more favorable to [New Hampshire] than that recommended in the proposed consent decree”). But the consent decree was sufficiently favorable to New Hampshire to garner its approval. Although New Hampshire now suggests that it “compromised in Maine’s favor” on the definition of “Middle of the River” in the 1970’s litigation, Brief in Opposition to Motion to Dismiss 24, that “compromise” enabled New Hampshire to settle the case, see id., at 24-25, on terms beneficial to both States. Notably, in their joint motion for entry of the consent decree, New Hampshire and Maine represented to this Court that the proposed judgment was “in the best interest of each State.” Motion for Consent Judgment 1. Relying on that representation, the Court accepted the boundary proposed by the two States. New Hampshire v. Maine, 434 U.S. 1 (1977).
At oral argument, New Hampshire urged that the consent decree simply fixed the “Middle of the River” at “an arbitrary location based on the administrative convenience of the parties.” Tr. of Oral Arg. 37. To the extent New Hampshire implies that the parties settled the lateral marine boundary dispute without judicial endorsement of their interpretation of “Middle of the River,” that view is foreclosed by the Court’s determination that “[t]he consent decree . . . proposes a wholly permissible final resolution of the controversy both as to facts and law,” New Hampshire v. Maine, 426 U.S., at 368-369. Three dissenting Justices agreed with New Hampshire that the consent decree interpreted the middle-of-the-river language “by agreements of convenience” and not “in accordance with legal principles.” Id., at 371 (White, J., joined by Blaekmun and Stevens, JJ., dissenting). But the Court concluded otherwise, noting that its acceptance of the consent decree involved “[n]othing remotely resembling ‘arbitral’ rather than ‘judicial’ functions,” id., at 369. The consent decree “reasonably invested] imprecise terms with definitions that give effect to [the 1740] decree,” ibid., and “[did] not fall into the category of agreements that we reject because acceptance would not be consistent with our Art. Ill function and duty,” ibid.
New Hampshire also contends that the 1977 consent decree was entered without “a searching historical inquiry into what that language [‘Middle of the River’] meant.” Tr. of Oral Arg. 39. According to New Hampshire, had it known then what it knows now about the relevant history, it would not have entered into the decree. Ibid. We do not question that it may be appropriate to resist application of judicial estoppel “when a party’s prior position was based on inadvertence or mistake.” John S. Clark Co. v. Faggert & Frieden, P. C., 65 F. 3d
Question: Who is the petitioner of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
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songer_respond1_3_2
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E
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Your task is to determine which category of federal government agencies and activities best describes this litigant.
Snyder HOWELL, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
No. 85-1078.
United States Court of Appeals, Seventh Circuit.
Argued Oct. 21, 1985.
Decided Oct. 31, 1985.
Rehearing Denied Nov. 26, 1985.
Thomas J. Wolf, Jr., P.C., Harrisburg, 111., for plaintiff-appellant.
John A. Dudeck, Jr., Asst. Atty. Gen., Tax Div., Dept, of Justice, Washington, D.C., for defendant-appellee.
Before POSNER, FLAUM and EASTER-BROOK, Circuit Judges.
EASTERBROOK, Circuit Judge.
An employer that establishes a pension plan for its employees sometimes contributes funds to the plan on top of the employees’ stated salaries. These are “employers’ contributions” and are not taxable income for the employee until the plan pays benefits to the employee. 26 U.S.C. §§ 401(a), 4Q3, 501(a). The employer alternatively may give the employees higher stated salaries but dedicate some of the salaries to the pension plan. These deductions are “employees’ contributions” and are taxable income to the employee, but corresponding amounts of pension disbursements will not be taxed. 26 U.S.C. §§ 72, 402.
The distinction between “employers’ contributions” and “employees’ contributions” to qualified pension plans is almost wholly nominal. It is a matter of indifference to an employer whether it pays $30,000 salary to the employee plus $3,000 to a pension plan on the employee’s behalf, or instead $33,000 to the employee, of which it sends $3,000 to a pension plan. In either event the employee receives $30,000 at once and $3,000 in deferred compensation, and the employer may deduct the whole $33,000 as an ordinary and necessary business expense. 26 U.S.C. § 404. But the tax consequences of the distinction are substantial. The tax on employers’ contributions is deferred until retirement, and the discounted present value of the deferred tax is less than the value of tax paid today.
The distinction between employers’ and employees’ contributions is one example of the dominance of form over substance in the tax code. Perhaps aware that there was no substance—but substantial consequences for the revenue — in this distinction, Congress allowed governmental bodies (but not private employers) to select still a third label. A section added in 1974, 26 U.S.C. § 414(h)(2), provides that if a state or local government’s contributions “are designated as employee contributions but [the] employing unit picks up the contributions, the contributions so picked up shall be treated as employer contributions.”
This statute might be read to require a state to “pick up” the contributions by assuming them, topping up the total compensation so that the employee then receives his full stated salary without a deduction for pensions. There is some support for such a view in the conference report, which describes a “pick up” plan as one “where the contribution is paid by the government, with no withholding from the employee’s salary ...” H.R.Conf.Rep. 93-1280, 93d Cong., 2d Sess. 279 (1974), U.S. Code Cong. & Admin.News 1974, pp. 4639, 5038, 5060. But a requirement that there be “no withholding” from the salary would be the same thing as. traditional “employers’ contributions.” The Internal Revenue Service therefore has treated § 414(h)(2) as an extension of the nominalism from which it grew. See Rev.Rul. 81-35, 1981-1 Cum. Bull. 255; Rev.Rul. 81-36, 1981-1 Cum. Bull. 256; Rev.Rul. 77-462, 1977-2 Cum. Bull. 358.
Under the Commissioner’s interpretation § 414(h)(2) permits a government to treat contributions as “employees’ contributions” for its own purposes but “employers’ contributions” for purposes of federal income taxation. The government establishes two “salaries.” One, for state purposes, is the base from which contributions are withheld; the other, for federal purposes, is a lower salary from which nothing is withheld; the difference between the salary for state purposes and the salary for federal purposes is the “picked up” contribution. In order to use this option, a government announces that the employees’ contributions have been “picked up” and reduces their salaries — or more accurately the amounts shown as wages on their W-2 forms. So long as the employer forecloses the employees’ “option of choosing to receive the contributed amounts directly instead of having them paid by the employer to the pension plan” (Rev.Rul. 81-35, 1981 Cum.Bull. 255), it meets the requirements of § 414(h)(2).
In 1980 Illinois enacted a statute providing that after January 1, 1981, each governmental unit “may pick up the employee contributions required” by the state’s pension laws. Ill.Rev.Stat. ch. 108½ § 18-133.1. The Commissioner then issued a private letter ruling that contributions “picked up” by the state after December 31, 1981, and paid to the retirement system would not be includable in the employees’ gross income. See CCH Private Letter Rulings, Ltr. 8209038 (Dec. 4, 1981).
Snyder Howell, a circuit judge in Williamson County, Illinois, is covered by the Judges’ Retirement System of Illinois. Some of each circuit judge’s salary is withheld and turned over to the system; the exact amount withheld depends on whether the judge is contributing to a fund for spouses’ benefits. Judge Howell’s contribution was 11% of his salary. For purposes of state law, the contributions are employees’ contributions. (The parties have not told us why, but the salaries of Illinois judges are protected against diminution during their terms in office, and the adoption of employees’ contributions may have been a method of establishing a pension plan without a nominal reduction in the judges’ salary or an increase in the net payments made by the state.) Beginning in 1982, the Comptroller of Illinois issued Howell and other judges W-2 forms showing a lower taxable salary; the Comptroller reduced Howell’s stated salary by the 11% contribution made to the Retirement System. The state did not make any other change in Howell’s compensation. Only the taxable wage reported to the IRS changed. As a result, the state withheld less tax from Howell’s check.
Judge Howell then filed amended tax returns for 1978-80. He claimed a refund for taxes paid on the sums that had been withheld from his pay and turned over to the Retirement System. These sums, he maintained, had been “picked up” by the state fully as much as the sums turned over to the Retirement System starting in 1982. There was no substantive difference and therefore, he maintained, there should be no tax difference. The IRS denied the request, and Howell filed this suit. The suit is financed by the Illinois Judges Association, whose members have an interest in common with Judge Howell.
The district court concluded that the pension contributions before 1982 were “employees’ contributions” within the meaning of federal law. State law designated them this way, and under federal law the employer’s designation controls. The proviso allowing employers to “pick up” employees’ contributions gives them a way to reverse the effect of their own designation, but they must avail themselves of the privilege. Illinois did not do so until 1982, so Howell lost. We agree with both the result and the reasoning.
The starting point for income taxation is that all sums paid to, or on behalf of, an employee are taxable income. 26 U.S.C. § 61. If Illinois were to send money directly to Judge Howell’s cousin on his behalf, the money would be Howell’s income even though he never saw it; if the state put gold coins in a safe deposit box for safekeeping until his retirement, this also would be Howell’s income. That the employee never gets the use of the money, or that the use is deferred, does not override the general principle that the full compensation for services rendered — no matter to whom paid, or when — is income immediately taxable to the person who earned the money. See United States v. Basye, 410 U.S. 441, 93 S.Ct. 1080, 35 L.Ed.2d 412 (1973) (payments to a pension plan are taxable when they vest even though not for the account of a particular person); Lucas v. Earl, 281 U.S. 111, 50 S.Ct. 214, 74 L.Ed. 731 (1930) (anticipatory assignments of income do hot reduce taxable income). Money paid to a retirement plan is money earned; that the employee has no control of the amount or the purpose to which it is devoted is an irrelevant detail. E.g., Hogan v. United States, 513 F.2d 170 (6th Cir.), cert. denied, 423 U.S. 836, 96 S.Ct. 62, 46 L.Ed.2d 55 (1975) (amounts involuntarily paid to the federal civil service retirement plan are taxable income); Zwiener v. CIR, 743 F.2d 273 (5th Cir.1984) (same for a state plan).
It would not have mattered in Lucas v. Earl, which held that the employee must pay tax on 100% of his salary even though he had irrevocably assigned 50% of it to someone else, if the employer had “reduced” the salary by 50% and “contributed” an identical amount to the other party. The matching contribution would still be compensation for services rendered, and therefore income. So, too, is any contribution to a pension plan. It therefore does not matter whether a contribution on an employee’s behalf is designated as an “employer’s contribution” — not unless Congress causes it to matter. Congress did. By allowing an employer to designate a contribution as an “employer’s contribution” and defer taxation of that income until retirement, Congress both created an opportunity and left its exercise to the employer. As an economic matter, employers’ contributions and employees’ contributions are identical; they differ in name only. Under the tax law the name matters, and the employer picks the name.
Section 414(h)(2) gives governmental employers a second name to use, in order to achieve the same result. Its function is evidently to avoid hurdles of state law that might prevent governments from designating pension contributions as “employers’ contributions” and so deferring employees’ tax. By “picking up” contributions, governments may both preserve their internal characterization of the contributions and achieve the tax benefits that private employers regularly do when they make “employers’ contributions.”
The employee is stuck with the employer’s designation, no matter what it is. Until 1981 Illinois by statute called the contributions to the Judges’ Retirement System employees’ contributions. This remitted Judge Howell to the presumptive rule that the whole salary is taxable. We could not accept his argument that the state “picked up” his contributions even before 1982 — because he never saw the money either before or after the new law and never has had any choice about its destination — without either reversing one of the most venerable principle of taxation (that he who earns the money pays the full tax) or disregarding the rule that permits the employer to designate a contribution as made by it or by the employee. Illinois made one choice for years before 1982, and now (using the right to “pick up” contributions) it has made another. Judge Howell is bound by both.
This exalts form over substance, no doubt. In tax, however, form and substance often coincide. The election between employers’ and employees’ contributions is nothing but form, and the new designation option in § 414(h)(2) simply continues the practice. A court must apply an empty distinction with the same fidelity as it applies any other. Congress may choose, if it wishes, to allow employers to control the tax consequences of pension contributions, and the selection of one device is neither better nor worse than another. “When we are dealing with statutory terms of art, the form-substance dichotomy is a false one. ‘Substance’ can only be derived from forms created by the statute itself. Here substance is form and little else; there is no natural law of reverse triangular mergers.” Joseph Isenbergh, Musings on Form and Substance in Taxation, 49 U.Chi.L.Rev. 859, 879 (1982).
The designation has consequences. Taxes deferred are taxes reduced. Similarly the change in wages reported on the W-2 form affects the amount of income from which exclusions may be made, and it reduces the adjusted gross income from which deductions may be made. One tax effect breeds another. None of this matters. The outcome of this case follows from the employer’s power to elect designations with tax effects for the employee. Before 1982 the designation in Illinois was that the contributions were made by the employee, and that is that.
Affirmed.
Whether the state must pass a statute, as opposed to using some other process of reducing wages and “picking up" contributions that is adequate for the purpose under state law, we need not decide. We also do not decide whether the Commissioner’s definition of a "pick up" is the only one he could have chosen. The IRS has discretion to interpret ambiguous terms, and the interpretation the Commissioner has placed on § 414(h)(2) is highly favorable to taxpayers. Perhaps he could have been more stingy; we need not say.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Which category of federal government agencies and activities best describes this litigant?
A. cabinet level department
B. courts or legislative
C. agency whose first word is "federal"
D. other agency, beginning with "A" thru "E"
E. other agency, beginning with "F" thru "N"
F. other agency, beginning with "O" thru "R"
G. other agency, beginning with "S" thru "Z"
H. Distric of Columbia
I. other, not listed, not able to classify
Answer:
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songer_appel2_7_3
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A
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the second listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine the race or ethnic identity of this litigant as identified in the opinion. Names may be used to classify a person as hispanic if there is little ambiguity. All aliens are coded as "not ascertained".
Application of William BALDWIN for Appointment of Counsel, William Baldwin, Appellant, and John M. Espinoza, Petitioner-Appellant, v. Charles L. BENSON, Warden, United States Penitentiary, Leavenworth, Kansas, United States Parole Commission, Griffin B. Bell, Attorney General of the United States, and United States Bureau of Prisons, Respondents-Appellees.
Nos. 77-1739, 77-1794.
United States Court of Appeals, Tenth Circuit.
Sept. 28, 1978.
Clayton D. Knowles, Denver, Colo., for appellant.
Leonard D. Munker, Federal Public Defender, on brief, for petitioner-appellant John M. Espinoza.
Roger M. Theis, Asst. U. S. Atty., Topeka, Kan. (James P. Buchele, U. S. Atty., Topeka, Kan., on brief), for respondents-appel-lees.
Before SETH, Chief Judge, and HOLLOWAY, McWilliams, BARRETT, DOYLE, McKAY and LOGAN, Circuit Judges.
WILLIAM E. DOYLE, Circuit Judge.
The question here presented is whether a person who is charged with violation of parole is entitled, as a matter of right, to appointed counsel in parole revocation proceedings before both the Commission and court, under 18 U.S.C. § 4214. Both of these defendants have been charged with parole violation and in the applicable proceedings have had parole revoked following hearings in both cases. This is the only question raised in the appeal of William Baldwin.
The case of John M. Espinoza is an appeal from the denial of a petition for writ of habeas corpus which raised other points besides the right of counsel. Both appellants have been in the United States Penitentiary at Leavenworth, Kansas, and the prior court proceedings from which the appeals are taken occurred in the United States District Court for the District of Kansas.
BALDWIN PROCEEDINGS
William Baldwin was originally convicted of bank robbery and was sentenced to 18 years in prison. He commenced serving his sentence on February 20, 1967, and was released on parole May 15, 1974. He originated in Connecticut and was supervised in that district. His offense was theft, on November 19, 1976, of $1,154.00 from a retail shop in Manchester, Connecticut. He pleaded nolo contendere to this on April 20, 1977, and was fined $250.00. On April 28, 1977, a parole revocation warrant was issued for Baldwin and this was executed on May 2, at which time he was arrested and placed in the Correctional Center at Hartford, Connecticut, without preliminary hearing on revocation. Thereafter, he was transferred to Leavenworth, where the parole revocation hearing took place. In connection with the parole violation proceeding, he requested the appointment of counsel. The case is entitled: In the Matter of the Application of William Baldwin for the Appointment of Counsel. On June 10,1977, a memorandum was filed by Judge Arthur J. Stanley, Jr., denying the request for counsel. Baldwin’s request for rehearing was also denied July 19, 1977. The validity of the order denying counsel is before us on appeal.
ESPINOZA PROCEEDINGS
Espinoza’s conviction was bank robbery. Following conviction on March 29, 1966, he was sentenced to 15 years in prison. Release on parole was on April 15, 1971. On August 12, 1976, however, he was arrested on a parole violation warrant. Following his being held in custody at a number of federal institutions, he was finally transferred to the Federal Penitentiary at Leavenworth, Kansas. There he was charged with parole violation for having allegedly committed (1) assault and battery in June 1972, to which he pled guilty on September 14, 1972, at San Jose, California; (2) two drunk driving charges, one in September 1972, and the other in November 1972, to both of which he pled guilty. Since these were misdemeanors, it was not considered that they were sufficiently serious to require parole revocation. On March 1, 1976, he was arrested in San Jose and charged with receiving stolen property and grand theft. He entered a plea of nolo contendere on June 2, 1976 to two counts of receiving stolen property. It was understood that these would be reduced to misdemeanors. On July 1, 1976, he was sentenced to 90 days in the county jail. On August 12, 1976, he was arrested for violation of federal parole. Here again there was no preliminary revocation hearing held. Prior to the hearing on the violation of parole, he requested the appointment of counsel to assist him at the revocation hearing. However, this was denied, as shown by the memorandum of Judge Stanley, filed November 23, 1976. Subsequently, there was a hearing on the revocation and parole was revoked December 22, 1976. In June 1977, Espinoza requested that counsel be appointed to aid him in a habeas corpus proceeding. The Federal Public Defender’s office from Kansas was appointed to represent him. The proceeding was entitled: John M. Espinoza v. Charles L. Benson, Warden, etc., et al., No. 77-3187. The petition for habeas corpus was filed with the aid of the Public Defender’s office. This challenged the parole revocation on a number of grounds including the failure to appoint counsel for the revocation hearing. The petition for permanent writ was denied August 16, 1977, by Judge Richard D. Rodgers. Thereafter, notice of appeal was filed, and an order was entered allowing the appeal on August 31, 1977.
THE DISTRICT COURT DECISION
The trial court held that notwithstanding adoption by the Congress of 18 U.S.C. § 4214, that the appointment of counsel in a revocation proceeding continues to be within the discretion of the trial judge. The reason given was that the provision of the Parole Act which provides that counsel shall be provided adds the statement “pursuant to 18 U.S.C.A. § 3006A.” The trial court said the term “pursuant to” (in § 4214) means “in accordance with.” “The language of subsection (g) of 18 U.S.C. § 3006A is clear and unambiguous in providing the appointment of counsel for a person subject to revocation of parole when the court determines that the interests of justice so require.”
The court cited the pre-Parole Aet decisions of the Supreme Court, Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973) and Morrissey v. Brewer, 408 U.S. 471, 490, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). These cases were, of course, decided in the context of § 3006A(g), which expressly authorized the exercise of discretion in appointment of counsel. The conclusion was that the interest of justice did not call for appointment of counsel in the instant case.
I.
Before the enactment of the Parole Commission and Reorganization Act, which is commonly referred to as the Parole Act, the appointment of counsel in revocation proceedings was left to the discretion of the court or magistrate having jurisdiction of the case. See 18 U.S.C. § 3006A. The government contends that the discretionary aspect continues under the new law. One reason for this is that the court decisions have shown reluctance toward appointing counsel in parole revocation proceedings.
The Supreme Court has held, however, that the Sixth and the Fourteenth Amendments require the state and the federal government to appoint counsel for indigents accused of crime. See Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938); Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963); and Mempa v. Rhay, 389 U.S. 128, 88 S.Ct. 254, 19 L.Ed.2d 336 (1967), which requires appointment of counsel for an indigent defendant at every stage of a criminal proceeding which involves substantial rights. But the Supreme Court in Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972), ruled that parole revocation is not part of a criminal prosecution so as to require the appointment of counsel in these proceedings. The reasoning was that it deprived the parolee of less than the absolute liberty enjoyed by every citizen and it deprived him of only the conditional liberty dependent on observance of special parole restrictions. Morrissey did not decide the question whether the parolee is entitled to the assistance of counsel if he is indigent. The present law was enacted subsequent to Morrissey v. Brewer, supra. It was in that background that the Parole Act was adopted. Although it refers generally to § 3006A of the Criminal Justice Act, it provides that for those who are financially unable to hire counsel, counsel shall be provided pursuant to the Criminal Justice Act. Consistent with this, the Act specifically lists and enumerates the rights of the parolee, procedural and substantive, including the right to counsel at preliminary revocation proceedings as well as final ones.
The Supreme Court’s most recent decision in this general subject area, Moody v. Dag-gett, 429 U.S. 78, 84-85, 97 S.Ct. 274, 277, 50 L.Ed.2d 236 (1976), through the Chief Justice, commented on the right to counsel under § 4214(b)(1) and recognized the right to counsel under that related section by stating that the parolee is entitled to assistance of appointed counsel if requested. It was there said:
The 1976 Act and accompanying regulations, [28 CFR § 2.1 et seg.] (1976), incorporate the former procedures with few modifications. Under current law, the Parole Commission reviews the parole violator warrant within 180 days of its issuance, 18 U.S.C.A. § 4214(b)(1) [June 1976 Supp.]; the parolee, after notification of the impending review, is now entitled to assistance of appointed counsel, if requested, in preparing his written response. 18 U.S.C.A. § 4214(b)(1), (a)(2)(B) [June 1976 Supp.]. The 1976 Act also abolishes the annual status review formerly required. Previously it was general practice to defer execution of the warrant to completion of the subsequent sentence. It is now firm Commission policy that unless “substantial mitigating circumstances” are shown, the parole violator term of a parolee convicted of crime is to run consecutively to the sentence imposed for the subsequent offense. 28 CFR § 2.47(c) (1976). (Emphasis supplied).
II.
The legislative history of the Act shows that the Congressional intent was to provide counsel in all revocation proceedings unless the parolee waives such right. The House Conference Committee stated on page 34 of the Conference Report, reprinted in (1976) U.S.Code Cong. & Admin.News, pp. 351, 366, that “both the preliminary and revocation hearing shall be conducted in accordance with the following procedures”:
(b) the right to be represented by retained counsel or if he is unable to retain counsel, counsel shall be provided pursuant to the Criminal Justice Act (18 U.S.C. 3006A) or another representative as provided by rules and regulations.
On page 21 of the Report, it is said:
In the area of parole decision-making, the legislation establishes clear standards as to the process and the safeguards incorporated into it to insure fair consideration of all relevant material, including that offered by the prisoner. The legislation provides a new statement of criteria for parole determinations, which are within the discretion of the agency, but reaffirms existing caselaw as to judicial review of individual case decisions.
In the next paragraph the Report describes the provisions for appointment of counsel as follows:
The legislation also reaffirms caselaw insuring a full panoply of due process to the individual threatened with return to prison for violation of technical conditions of his parole supervision, and provides that the time served by the individual without violation of conditions be credited toward service of sentence. It goes beyond present law in insuring appointment of counsel to indigents threatened with reimprisonment. (Emphasis supplied).
Prior to enactment the Senate version of this measure provided for optional appointment under the Criminal Justice Act. The House version required retained or appointed counsel unless waived by the parolees. It was said by Representative Kastenmeier on the floor of the House:
* * * The two Houses were in disagreement over the role of appointed counsel in revocation hearings. The House bill held that revocation of parole entailed a serious possible deprivation of liberty which required that the parolee have the benefit of counsel in order to be able to marshal his arguments and organize his defense.
The Senate agreed that this was a reasonable position, and the Conference does provide for counsel at revocation proceedings. 122 Cong.Rec. H1500 (March 3, 1976).
III.
The wording of 18 U.S.C. § 4214(a)(2)(B) shows an intent on the part of Congress to confer on the parolee a right to counsel unless the parolee knowingly and intelligently waives such representation. The enacted provision reads as follows:
Opportunity for the parolee to be represented by an attorney (retained by the parolee, or if he is financially unable to retain counsel, counsel shall be provided pursuant to section 3006(A) or, if he so chooses, a representative as provided by rules and regulations, unless the parolee knowingly and intelligently waives such representation.
Use by Congress of the word “shall” and of the words which require that the parolee waive counsel knowingly and intelligently are cogent evidence of this intent on the part of Congress.
The quoted section is a part of the procedural provisions of the Act as to hearings to be conducted by the Parole Commission, the giving of notice as to violations and as to the time, place and purpose of the scheduled hearing, provision for appeal, the right of the parolee to testify and present witnesses, his opportunity to be apprised of the evidence against him and to confront and cross-examine adverse witnesses if he so requests. It also provides for subpoenaing witnesses and describes the proceedings applicable to subsection (B).
The government’s argument that the right to counsel in these proceedings continues to be subject to the discretion of the court is based on the reference in § 4214(a)(2)(B) to § 3006A. Section 3006A is the Criminal Justice Act, the various sections of which detail the procedure for appointment of counsel in criminal prosecutions. Subsection (g) of that Act states that persons subject to revocation of parole may be furnished representation pursuant to the Criminal Justice plan when the magistrate or the judge determines that the interests of justice so require. The government’s position is that this general reference to the Criminal Justice Act resulted in resurrecting the provision of the Act which makes appointment of counsel discretionary; that the matter of appointment of counsel continues to be a matter of discretion and not of right. This argument disregards the use of “shall” in the new Act and disregards as well the many evidences that Congress intended for the parolee whose parole was being revoked to have the right to demand or waive counsel. If Congress had intended for the law to remain the same, it is unlikely that it would have couched § 4214(a)(2)(B) in terms like “shall.” Nor would it have provided for existence of the right unless waived. Furthermore, Congress would not have, on the one hand, granted to the parolee a right to have counsel, while simultaneously nullifying the right by deferring generally to the Criminal Justice Act.
The terms of the Act considered as a whole are at odds with the construction which the government contends should be given. The new Parole Act undertakes to provide for due process at every stage of the proceedings and in this connection it provides for the right to counsel at each stage.
Thus, even a revocation which is pursuant to § (b)(1), which is based on a conviction for a federal, state or local crime subsequent to the granting of parole, notwithstanding that it constitutes probable cause for the revocation, nevertheless, requires a review by the Commission. It also requires that the parolee receive notice of the pending review and an opportunity to submit a written application containing information as to the disposition of the detainer (resulting from the conviction which is the basis for the parole violation). Section (b)(1) further states that the parolee shall have counsel as provided in subsection (a)(2)(B) unless it is waived to assist him in the preparation of such application.
If, in connection with revocation based on conviction the Commission needs additional information, notice must be given to the parolee. Also, he must be allowed to appear and testify and, unless waived, shall have counsel as provided in subsection (a)(2)(B).
In the situation in which the alleged violator is taken by warrant and knowingly and intelligently waives his right to a hearing under subsection (A), he is entitled to counsel under subsection (c), where he waives preliminary hearing and where the final revocation hearing is held within 90 days.
The point we make is that counsel is provided for not only at the revocation hearing, but in connection with most other actions which are taken incident to such revocation. All of this we say refutes the government’s argument that the right to counsel is hedged or conditioned. Instead it evidences intent by Congress that, unless waived, the right exists throughout the proceedings.
IV.
A line of decisions of this court, most of which are unpublished, pursue a position opposite to that which we take here. See Robinson v. Benson, 570 F.2d 920 (10th Cir. 1978); In the Matter of the Application of Dale E. Crowder for Appointment of Counsel, No. 76-2103 (10th Cir., June 10, 1977); In the Matter of the Application of Thomas A. Quirk for Appointment of Counsel, No. 76-1578 (10th Cir., December 7, 1976). Cf. Coronado v. United States Board of Parole, 551 F.2d 275 (10th Cir. 1977). With the exception of Robinson v. Benson, supra, these are summary affirmance cases. All of these decisions dispose of the issue on the ground that the general reference in § 4214(a)(2)(B) to § 3006A, the Criminal Justice Act, perpetuated the old law. One subsection of § 3006A, subsection (g), provides for discretionary appointment of counsel. If the statute had been written so as to refer specifically to subsection (g) of § 3006A, the argument of the government would be better supported. As it is, the reference contained in § 4214(a)(2)(B) is to § 3006A alone. It is then a general reference to the machinery contained in the Criminal Justice Act and brings into play the machinery of that Act like manner of appointment and other administration.
In our unpublished decision, In the Matter of Ronald D. Richardson for Appointment of Counsel, No. 76-1786 (10th Cir., October 20, 1976), this court reiterated that no right to counsel existed. It said:
The Supreme Court has held that there is no per se requirement of appointment of counsel for indigents in the context of a parole revocation setting. Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973). However, 18 U.S.C.A. § 4214(a)(2)(B) and 18 U.S.C. § 3006(A) [3006A] provide for discretionary appointment of counsel where a court determines that the interests of justice so require.
The district court noted that appellant’s admission of conviction of another crime would be sufficient to justify revocation of parole, regardless of appellant’s intention to dispute charges listed on the warrant. Cotner v. United States, 409 F.2d 853 (10th Cir. 1969). On this basis, the district court determined that the interests of justice did not require appointment of counsel in appellant’s case.
This is somewhat representative of the basis on which these decisions have proceeded, which is that they assume that 18 U.S.C. § 4214(a)(2)(B) incorporates by reference 18 U.S.C. § 3006A(g). As noted above, they fail to take into account that subsection (g) is not mentioned in the new enactment. The opinion of the Supreme Court in Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973), continues to be cited, notwithstanding that it is no longer law. We quote from Ronald D. Richardson, supra, because it is representative of the way that the others are handled. Because these cases are not in accord with the Act of Congress, they can no longer be regarded as authority.
The explanation for the resilience of the discretion rule in parole proceedings is perhaps attributable to the fact that the parole status has long been regarded as a privilege, which can be revoked at will. Due process in this context has not been considered a problem by the courts, and undoubtedly this is why the courts have been slow to accept the dictates of the 1976 Parole Act, even though it defines the rights of parolees in strong terms.
V.
Finally, counsel for the government have filed a “Suggestion of Mootness” in respect to both William Baldwin, appellant, and John M. Espinoza, petitioner-appellant.
As to Baldwin, it is said that following a regular review hearing in March 1978, the Parole Commission ordered that Baldwin be reparoled effective June 8, 1978. Subsequently, Baldwin was released on parole and is now under parole supervision.
Espinoza, it is said, was granted parole on April 25, 1978, “to the Northern District of California.” The government claims that it is axiomatic that a concrete and continuing case or controversy must exist in order to allow a judicial resolution of the issues presented by a case, citing DeFunis v. Ode-gaard, 416 U.S. 312, 316, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1971), and North Carolina v. Rice, 404 U.S. 244, 246, 92 S.Ct. 402, 30 L.Ed.2d 413 (1971). It is also pointed out that since neither appellant is in confinement, the required concrete case is not present.
We must disagree with the government’s position. See Sibron v. New York, 392 U.S. 40, 88 S.Ct. 1889, 20 L.Ed.2d 917 (1968). There Sibron was convicted and sentenced to six months. He completed service of the six-month sentence, and it' was contended that the case became moot when he was released under St. Pierre v. United States, 319 U.S. 41, 63 S.Ct. 910, 87 L.Ed. 1199 (1943). The Court «ruled, however, that serving the sentence did not cause mootness. It rejected the proposition that there was no longer subject matter on which the judgment of the court could operate. The Supreme Court noted that most criminal cases involve adverse collateral legal consequences, and so the mere possibility that this will be the case is enough to preserve a criminal case from ending “ignominiously in the limbo of mootness.” The fact that the conviction could be used in New York for impeachment purposes was regarded as enough to keep the litigation alive. The Court said that the case of St. Pierre had to be read in the light of later cases to mean that a criminal case is moot only if it is shown that there is no possibility that any collateral legal consequences will flow from the challenged conviction.
As to continued jurisdiction to entertain a writ of habeas corpus, Jones v. Cunningham, 371 U.S. 236, 83 S.Ct. 373, 9 L.Ed.2d 285 (1963), has held that a state prisoner free on parole was in custody within the meaning of the habeas corpus act, § 2241, and could challenge the validity of his conviction. The Court said that while the petitioner’s parole released him from immediate physical imprisonment, it nevertheless imposed conditions which significantly confined and restrained his freedom, and that this was enough to keep him in the “custody” of the members of the Parole Board, in this instance Virginia, within the meaning of the habeas corpus statute. In Jones, as here, the accused had been in prison when the petition was filed.
In Carafas v. LaVallee, 391 U.S. 234, 88 S.Ct. 1556, 20 L.Ed.2d 554 (1968), the petitioner was in prison when the petition was filed. His sentence expired while the petition was pending and he was unconditionally released. The Court overruled its prior decision in Parker v. Ellis, 362 U.S. 574, 80 S.Ct. 909, 4 L.Ed.2d 963 (1960), and held that the release did not moot the proceeding. It noted that civil disabilities and burdens accompanied the prisoner after his release. This was seen as justification for its conclusion that the case was not moot.
Cf. United States v. Morgan, 346 U.S. 502, 74 S.Ct. 247, 98 L.Ed. 248 (1954), wherein the Supreme Court held that where habeas corpus cannot be used that the writ of coram nobis can be employed for the purpose of attacking a judgment.
Thus it must be concluded that the suggestion of mootness is wholly without merit.
The cause is remanded to the district court with directions to that court to void the orders of revocation which were granted illegally and without having afforded the appellant and the petitioner-appellant the right to have counsel at the said hearing and for related proceedings consistent with the views expressed above.
Question: This question concerns the second listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". What is the race or ethnic identity of this litigant as identified in the opinion?
A. not ascertained
B. caucasian - specific indication in opinion
C. black - specific indication in opinion
D. native american - specific indication in opinion
E. native american - assumed from name
F. asian - specific indication in opinion
G. asian - assumed from name
H. hispanic - specific indication in opinion
I. hispanic - assumed from name
J. other
Answer:
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songer_respond1_3_2
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I
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Your task is to determine which category of federal government agencies and activities best describes this litigant.
ROMANO et al. v. UNITED STATES.
(Circuit Court of Appeals, Second Circuit.
November 20, 1925.)
No. 77.
1. Criminal law <©=>l 165(1) — Prosecution will be treated on appeal as though being on first count of indictment only, where acquittal was had on second count.
Where jury found defendants guilty on first count of indictment and acquitted them on second count, Circuit Court of Appeals on appeal will, treat ease as though prosecution had been on first count alone.
2. Customs duties <@=>134 — Intoxicating liquors <@=>236(20) — Proof held not to establish that liquors were imported or brought into country.
Proof held to fail to establish that liquors, as charged in indictment, were either imported or' brought into this country, and hence submission to jury was error.
3. Criminal law <@=>18 — Prohibition law effective. only in territory of United States.
The National Prohibition Law (Comp. St. Ann. Supp. 1923, § 10138-!4 et seq.), as applied to unlawful importation, is effeetiye only in the territory of the United - States.
4. Intoxicating liquors <§=147(l) — Not crime to sell or deliver intoxicating liquors on the high seas.
It is not a crime to sell or deliver intoxicating liquors on the high seas.
5. Customs duties <§=>134 — Intoxicating liquors <§=>224 — Burden resis on government to prove importation of liquor within judicial district, where prosecution was had.
In prosecution for illegal importation of liquors, burden rested on government to prove beyond reasonable doubt thát cargo was imported within judicial district where action was prosecuted.
6. Criminal law <§=>753(2) — Court shouid direct verdict, where facts are as consistent with innocence as with guilt.
Where facts are as consistent with innocence as with guilt of accused, there is nothing to submit to jury, and court should direct verdict on motion duly presented.
In Error to the District Court of the United States for the Eastern District of New York.
Criminal prosecution- of Michele Romano and others for illegal importation of liquor. From a judgment of conviction, defendants bring error.
Reversed, with directions.
Wallace E. J. Collins, of Jamaica, N. Y., and Morris Kamber, of Brooklyn, N. Y. (Otho S. Bowling and Vine H. Smith, both of New York City, of counsel), for plaintiffs in error.
Ralph C. Greene, U. S. Atty., and William A. De Groot, Asst. U. S. Atty., both of Brooklyn, N. Y.
Before HOUGH, MANTON, and HAND, Circuit Judges.
MANTON, Circuit Judge.
There are two counts to the indictment now said to charge the defendants below with the crime of violating the Tariff Act of 1922, § 593 (Comp. St. Ann. Supp. 1923, §§ 5841hl2, 5841hl3). The first count charges that between December 1, 1924, and January 1, 1925, “in the waters of Long Island Sound, off Huntington and within Huntington Harbor, Suffolk county, Long Island, state and Eastern district of New York, *' * did unlawfully, fraudulently and knowingly import and bring into- the United States * * 9 upwards of 8,000 cases of whisky and champagne, the same being intoxicating liquors, 9 *■ * without first obtaining a permit from the Commissioner of Internal Revenue so to do-, in violation of the Act of Congress of October 28, 1919, known as the National Prohibition Act [Co-mu. St. Ann. Supp. 1923, § 10138% et seq.]/ 9 * *”
The second count charges that during the same period and at the same place the defendants bolo-w “did unlawfully, fraudulently and knowingly conceal merchandise after the same had been brought info the United States contrary to- law and to the provisions of 9 * 9 the National Prohibition Act,” and in that “during the times aforesaid there was imported and brought into the United States 9 ,i: * upwards of 8,000 eases of intoxicating liquors, 9 * 9 and thereafter, at the times and places before set forth, the said defendants did conceal aboard * 9 * the auxiliary schooner, known as ‘Arco Felice IT,’ the said intoxicating liquors, * * knowing the .same to have been imported and brought into the United States, contrary to laiv as aforesaid.”
A motion was made to dismiss the indictment at the opening of the trial, which was denied, and upon request of counsel for the defendants below the government’s counsel announced that the defendants below were indicted under the Tariff Act, § 593 (b). They were convicted on the first count of the indictment and acquitted on the second.
The evidence established that the Arco Felice II was anchored at Huntington Harbor on the 31st of December, 1924. She was a four-masted schooner, about 250 feet long and of Italian registry. The government patrol boat drew near, and members of the United States Coast Guard went aboard the schooner. One of the men engaged the captain in conversation and asked for the ship’s papers, which were produced, and they purported to bo clearance papers from Honduras to Havana in ballast, dated December 22-, 1924. A search of the vessel was made, and some loose corks and broken bottles were, found. Thereupon the captain was asked where the corks cam© from, and he said “they were left there by the stevedores in Havana.” 'Whereupon the captain was asked by the agent, “I thought you weren’t in Havana?” to which the captain “shrugged his shoulders.” A search warrant was procured, and examination o€ the vessel made, and there were found, in one of the rooms, three eases of liquor nailed up in a locker. In the crew’s quarters, several partly filled bottles were found. The schooner was then towed to anchorage off Bedlow’s Island. On January 2d further search was made, and there was found in a chest in one of the rooms other papers which purported to be clearance papers from Havana to St. Pierre, which were dated De>eember 7, 1924. On this manifest it was stated that in tbe cargo there were 8,215 cases of liquor. A log book was found, and there „were entries of records showing that on December 11th the vessel was sailing north along the coast of the United, States until December 17th, when Cape Hatteras was rounded, and then there was a change of the course northeast until December 19th, when a heavy sea was encountered. The entries then record running before the storm until December 21st or 22d, when the records indicate that the vessel was laboring heavily because of the heavy sea; with considerable increase of water in the bilges. There was an entry that the water in the bilges was increasing, the pumps were clogged with sand, and the vessel was in serious danger. Further entries tell of some distress of the vessel. The cases were found to contain Scotch whisky and champagne.
Considering the action of the jury, we may treat the case as though the prosecution had been upon the first count alone. The indictment is badly drawn, and a reading of all of it leaves one in doubt whether the pleader intended fo rest upon the Prohibition Act or upon section 593 of the Tariff Bill of 1922. It is certainly all the government could ask from us to assume, for purposes of argument only, that the indictment was intended to rest upon both statutes, and to charge a violation of both or either.
But with all these assumptions it still remains true that the government charged and undertook to prove as the incriminating facts that upwards of 8,000 eases of intoxicating liquor were imported cmd brought into the United States in and by the schooner of the plaintiffs in error. In our opinion the proof wholly failed to establish that any such liquors as charged in the indictment were either imported or brought into this country.
It is not necessary to investigate the difference, if any, between importation and “bringing in,” or to consider whether any act of smuggling was shown. The first question for any reviewing court is .this: Was the jury properly permitted to infer from the meager facts above stated that a substantial cargo of prohibited liquor was brought or imported or smuggled into the United States by the defendant? We think no reasonable man could draw such an inference, and therefore it was error to let the jury speculate.
We cannot eliminate the possibility— indeed, the probability — that the cargo, if ever landed by defendants, was at a place less frequented than' the shores of the Eastern district of New York, or that the defendants had parted with it outside the United States, or even abandoned it at sea. This criminal phase of the Prohibition Law is effective only in the territory of the United States. Cunard S. S. Co. v. Mellon, 262 U. S. 100, 43 S. Ct. 504, 67 L. Ed. 894, 27 A. L. R. 1306. It is not q crime to sell or deliver intoxicating liquors on the high seas. The Over the Top (D. C.) 5 F.(2d) 828. It is suggested that we may infer that there was an importation by smaller boats, which unloaded the cargó while at sea. But this could not be an importation by the defendants below. The burden rested upon the government-to prove beyond a reasonable doubt that the cargo was imported within the Eastern district of New York. United States v. Meagher (C. C.) 37 F. 875.
We find nothing in this record, except the presence of the ship in Huntington Harbor on the morning of December 31st and papers indicating a transportation of cargo to ports named therein, which may or may not have been fictitious. The log book tells us her position and weather conditions on days during her voyage. It shows nothing more than this. These circumstances, which are presented and from which we are asked to draw inferences,'do' not exclude the hypothesis of innocence which may be drawn. The facts are as consistent with innocence as with the guilt of the accused, and under such proof there was nothing to be submitted to' the jury, and it was the duty of the court to direct a verdict upon motion which was duly presented. Nosowitz v. United States (C. C. A.) 282 F. 575.
The judgment of conviction is reversed, with directions to the lower court to dismiss the indictment.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Which category of federal government agencies and activities best describes this litigant?
A. cabinet level department
B. courts or legislative
C. agency whose first word is "federal"
D. other agency, beginning with "A" thru "E"
E. other agency, beginning with "F" thru "N"
F. other agency, beginning with "O" thru "R"
G. other agency, beginning with "S" thru "Z"
H. Distric of Columbia
I. other, not listed, not able to classify
Answer:
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sc_authoritydecision
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D
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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the bases on which the Supreme Court rested its decision with regard to the legal provision that the Court considered in the case. Consider "judicial review (national level)" if the majority determined the constitutionality of some action taken by some unit or official of the federal government, including an interstate compact. Consider "judicial review (state level)" if the majority determined the constitutionality of some action taken by some unit or official of a state or local government. Consider "statutory construction" for cases where the majority interpret a federal statute, treaty, or court rule; if the Court interprets a federal statute governing the powers or jurisdiction of a federal court; if the Court construes a state law as incompatible with a federal law; or if an administrative official interprets a federal statute. Do not consider "statutory construction" where an administrative agency or official acts "pursuant to" a statute, unless the Court interprets the statute to determine if administrative action is proper. Consider "interpretation of administrative regulation or rule, or executive order" if the majority treats federal administrative action in arriving at its decision.Consider "diversity jurisdiction" if the majority said in approximately so many words that under its diversity jurisdiction it is interpreting state law. Consider "federal common law" if the majority indicate that it used a judge-made "doctrine" or "rule; if the Court without more merely specifies the disposition the Court has made of the case and cites one or more of its own previously decided cases unless the citation is qualified by the word "see."; if the case concerns admiralty or maritime law, or some other aspect of the law of nations other than a treaty; if the case concerns the retroactive application of a constitutional provision or a previous decision of the Court; if the case concerns an exclusionary rule, the harmless error rule (though not the statute), the abstention doctrine, comity, res judicata, or collateral estoppel; or if the case concerns a "rule" or "doctrine" that is not specified as related to or connected with a constitutional or statutory provision. Consider "Supreme Court supervision of lower federal or state courts or original jurisdiction" otherwise (i.e., the residual code); for issues pertaining to non-statutorily based Judicial Power topics; for cases arising under the Court's original jurisdiction; in cases in which the Court denied or dismissed the petition for review or where the decision of a lower court is affirmed by a tie vote; or in workers' compensation litigation involving statutory interpretation and, in addition, a discussion of jury determination and/or the sufficiency of the evidence.
NEW YORK STATE CONFERENCE OF BLUE CROSS & BLUE SHIELD PLANS et al. v. TRAVELERS INSURANCE CO. et al.
No. 93-1408.
Argued January 18, 1995
Decided April 26, 1995
Souter, J., delivered the opinion for a unanimous Court.
M. Patricia Smith, Assistant Attorney General of New York, argued the cause for petitioners in all cases. With her on the briefs for petitioners in No. 93-1414 were G. Oliver Koppell, Attorney General, Jerry Boone, Solicitor General, Peter H. Schiff and Andrea Green, Deputy Solicitors General, and Jane Lauer Barker, Assistant Attorney General. Robert A. Bicks, Patricia Anne Kuhn, Alan C. Drewsen, Jeffrey D. Chansler, Bartley J Costello III, Eileen M. Considine, and Beverly Cohen filed briefs for petitioners in No. 93-1408. Jeffrey J. Sherrin, Philip Rosenberg, and H. Bartow Farr III filed briefs for petitioner in No. 93-1415.
Deputy Solicitor General Kneedler argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Days, James A. Feldman, Allen H. Feldman, Nathaniel I. Spiller, and Judith D. Heimlich.
Craig P. Murphy argued the cause for respondents Travelers Insurance Co. et al. in all cases. With him on the brief were Darrell M. Joseph, Stephen M. Shapiro, Kenneth S. Geller, Andrew J. Pincus, Charles Rothfeld, Donald M. Falk, Zoe Baird, Theresa L. Sorota, Philip E. Stano, and Raymond A. dAmico. Harold N. Iselin argued the cause for respondents New York State Health Maintenance Organization Conference et al. in all cases. With him on the brief were Wendy L. Ravitz and Glen D. Hager
Together with No. 93-1414, Pataki, Governor of New York, et al. v. Travelers Insurance Co. et al., and No. 93-1415, Hospital Association of New York State v. Travelers Insurance Co. et al., also on certiorari to the same court.
Briefs of amici curiae urging reversal were filed for the State of Minnesota et al. by Hubert H. Humphrey III, Attorney General of Minnesota, and Richard S. Slowes, Assistant Attorney General, Richard Blumenthal, Attorney General of Connecticut, and Phyllis E. Hyman, Assistant Attorney General, J. Joseph Curran, Jr., Attorney General of Maryland, and Stanley Lustman and Elizabeth M. Kameen, Assistant Attorneys General, Roland W. Burris, Attorney General of Illinois, Pamela Carter, Attorney General of Indiana, Scott Harshbarger, Attorney General of Massachusetts, Jeremiah W. (Jay) Nixon, Attorney General of Missouri, Joseph P. Mazurek, Attorney General of Montana, Ernest D. Preate, Jr., Attorney General of Pennsylvania, Dan Morales, Attorney General of Texas, Darrell V. McGraw, Jr., Attorney General of West Virginia, and Joseph B. Meyer, Attorney General of Wyoming; for the American Federation of State County and Municipal Employees, AFL-CIO, by Larry P. Weinberg, John C. Dempsey, Robert M. Weinberg, Ian D. Lanoff, and Andrew D. Roth; for the American Hospital Association et al. by Peter F. Nadel, Margaret J. Hardy, William T. McGrail, and Dorothy Grandolfi Wagg; and for the National Governors’ Association et al. by Richard Ruda and Lee Fennell.
Briefs of amici curiae urging affirmance were filed for the Association of Private Pension and Welfare Plans et al. by Edward R. Mackiewicz; for Group Health Association of America, Inc., by Alan J. Davis and Brian D. Redraw; for the Federation of American Health Systems by Carl Weiss-burg and Robert E. Goldstein; for the National Carriers’ Conference Committee by Benjamin W. Boley, David P. Lee, and William H. Dempsey; for the National Coordinating Committee for Multiemployer Plans by Gerald M. Feder and Diana L. S. Peters; for the NYSA-ILA Welfare Fund et al. by C. Peter Lambos, Donato Caruso, Thomas W. Gleason, Ernest L. Mathews, Jr., and Kevin Marrinan; and for the Trustees of and the Pension Hospitalization Benefit Plan of the Electrical Industry et al. by Edward J. Groarke.
Briefs of amici curiae were filed for the International Foundation of Employee Benefit Plans by Paul J. Ondrasik, Jr., and Sara E. Hauptfuehrer; and for the Self-Insurance Institute of America, Inc., by George J. Pantos.
Justice Souter
delivered the opinion of the Court.
A New York statute requires hospitals to collect surcharges from patients covered by a commercial insurer but not from patients insured by a Blue Cross/Blue Shield plan, and it subjects certain health maintenance organizations (HMO’s) to surcharges that vary with the number of Medicaid recipients each enrolls. N. Y. Pub. Health Law § 2807-c (McKinney 1993). These cases call for us to decide whether the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. § 1001 et seq. (1988 ed. and Supp. V), pre-empts the state provisions for surcharges on bills of patients whose commercial insurance coverage is purchased by employee health-care plans governed by ERISA, and for surcharges on HMO’s insofar as their membership fees are paid by an ERISA plan. We hold that the provisions for surcharges do not “relate to” employee benefit plans within the meaning of ERISA’s preemption provision, § 514(a), 29 U. S. C. § 1144(a), and accordingly suffer no pre-emption.
I
A
New York’s Prospective Hospital Reimbursement Methodology (NYPHRM) regulates hospital rates for all in-patient care, except for services provided to Medicare beneficiaries. N. Y. Pub. Health Law §2807-c (McKinney 1993). The scheme calls for patients to be charged not for the cost of their individual treatment, but for the average cost of treating the patient’s medical problem, as classified under one or another of 794 Diagnostic Related Groups (DRG’s). The charges allowable in accordance with DRG classifications are adjusted for a specific hospital to reflect its particular operating costs, capital investments, bad debts, costs of charity care, and the like.
Patients with Blue Cross/Blue Shield coverage, Medicaid patients, and HMO participants are billed at a hospital’s DRG rate. N. Y. Pub. Health Law § 2807 — c(l)(a); see also Brief for Petitioners Pataki et al. 4. Others, however, are not. Patients served by commercial insurers providing inpatient hospital coverage on an expense-incurred basis, by self-insured funds directly reimbursing hospitals, and by certain workers’ compensation, volunteer firefighters’ benefit, ambulance workers’ benefit, and no-fault motor vehicle insurance funds, must be billed at the DRG rate plus a 13% surcharge to be retained by the hospital. N. Y. Pub. Health Law §2807-c(l)(b). For the year ending March 31, 1993, moreover, hospitals were required to bill commercially insured patients for a further 11% surcharge to be turned over to the State, with the result that these patients were charged 24% more than the DRG rate. § 2807 — c(ll)(i).
New York law also imposes a surcharge on HMO’s, which varies depending on the number of eligible Medicaid recipients an HMO has enrolled, but which may run as high as 9% of the aggregate monthly charges paid by an HMO for its members’ in-patient hospital care. §§2807-c(2-a)(a) to (2-a)(e). This assessment is not an increase in the rates to be paid by an HMO to hospitals, but a direct payment by the HMO to the State’s general fund.
B
ERISA’s comprehensive regulation of employee welfare and pension benefit plans extends to those that provide “medical, surgical, or hospital care or benefits” for plan participants or their beneficiaries “through the purchase of insurance or otherwise.” §3(1), 29 U. S. C. §1002(1). The federal statute does not go about protecting plan participants and their beneficiaries by requiring employers to provide any given set of minimum benefits, but instead controls the administration of benefit plans, see §2, 29 U. S. C. § 1001(b), as by imposing reporting and disclosure mandates, §§ 101-111, 29 U. S. C. §§ 1021-1031, participation and vesting requirements, §§201-211, 29 U. S. C. §§1051-1061, funding standards, §§301-308, 29 U. S. C. §§1081-1086, and fiduciary responsibilities for plan administrators, §§401-414, 29 U. S. C. §§1101-1114. It envisions administrative oversight, imposes criminal sanctions, and establishes a comprehensive civil enforcement scheme. §§501-515, 29 U. S. C. §§ 1131— 1145. It also pre-empts some state law. §514, 29 U. S. C. §1144.
Section 514(a) provides that ERISA “shall supersede any and all State laws insofar as they ... relate to any employee benefit plan” covered by the statute, 29 U. S. C. § 1144(a), although pre-emption stops short of “any law of any State which regulates insurance.” § 514(b)(2)(A), 29 U. S. C. § 1144(b)(2)(A). (This exception for insurance regulation is itself limited, however, by the provision that an employee welfare benefit plan may not “be deemed to be an insurance company or other insurer ... or to be engaged in the business of insurance . . . .” § 514(b)(2)(B), 29 U. S. C. § 1144(b)(2)(B).) Finally, ERISA saves from pre-emption “any generally applicable criminal law of a State.” § 514(b)(4), 29 U. S. C. § 1144(b)(4).
C
On the claimed authority of ERISA’s general pre-emption provision, several commercial insurers, acting as fiduciaries of ERISA plans they administer, joined with their trade associations to bring actions against state officials in United States District Court seeking to invalidate the 13%, 11%, and 9% surcharge statutes. The New York State Conference of Blue Cross and Blue Shield plans, Empire Blue Cross and Blue Shield (collectively the Blues), and the Hospital Association of New York State intervened as defendants, and the New York State Health Maintenance Organization Conference and several HMO’s intervened as plaintiffs. The District Court consolidated the actions and granted summary judgment to the plaintiffs. Travelers Ins. Co. v. Cuomo, 813 F. Supp. 996 (SDNY 1993). The court found that although the surcharges “do not directly increase a plan’s costs or [a]ffect the level of benefits to be offered” there could be “little doubt that the [surcharges at issue will have a significant effect on the commercial insurers and HMOs which do or could provide coverage for ERISA plans and thus lead, at least indirectly, to an increase in plan costs.” Id., at 1003 (footnote omitted). It found that the “entire justification for the [sjurcharges is premised on that exact result — that the [surcharges will increase the cost of obtaining medical insurance through any source other than the Blues to a sufficient extent that customers will switch their coverage to and ensure the economic viability of the Blues.” Ibid, (footnote omitted). The District Court concluded that this effect on choices by ERISA plans was enough to trigger pre-emption under § 514(a) and that the surcharges were not saved by § 514(b) as regulating insurance. Id., at 1003-1008. The District Court accordingly enjoined enforcement of “those surcharges against any commercial insurers or HMOs in connection with their coverage of . . . ERISA plans.” Id., at 1012.
The Court of Appeals for the Second Circuit affirmed, relying on our decisions in Shaw v. Delta Air Lines, Inc., 463 U. S. 85 (1983), and District of Columbia v. Greater Washington Bd. of Trade, 506 U. S. 125 (1992), holding that ERISA’s pre-emption clause must be read broadly to reach any state law having a connection with, or reference to, covered employee benefit plans. Travelers Ins. Co. v. Cuomo, 14 F. 3d 708, 718 (1994). In the light of our decision in Ingersoll-Rand Co. v. McClendon, 498 U. S. 133, 141 (1990), the Court of Appeals abandoned its own prior decision in Rebaldo v. Cuomo, 749 F. 2d 133, 137 (1984), cert. denied, 472 U. S. 1008 (1985), which had drawn upon the definition of the term “State” in ERISA § 514(c)(2), 29 U. S. C. § 1144(c)(2), to conclude that “a state law must ‘purpor[t] to regulate . .. the terms and conditions of employee benefit plans’ to fall within the preemption provision” of ERISA. 14 F. 3d, at 719 (internal quotation marks omitted). Rejecting that narrower approach to ERISA pre-emption, it relied on our statement in Ingersoll-Rand that under the applicable “ ‘broad common-sense meaning,’ a state law may ‘relate to’ a benefit plan, and thereby be pre-empted, even if the law is not specifically designed to affect such plans, or the effect is only indirect.” 498 U. S., at 139; see 14 F. 3d, at 718.
The Court of Appeals agreed with the trial court that the surcharges were meant to increase the costs of certain insurance and health care by HMO’s, and held that this “purpose[ful] interference] with the choices that ERISA plans make for health care coverage ... is sufficient to constitute [a] ‘connection with’ ERISA plans” triggering pre-emption. Id., at 719. The court’s conclusion, in sum, was that “the three surcharges ‘relate to’ ERISA because they impose a significant economic burden on commercial insurers and HMOs” and therefore “have an impermissible impact on ERISA plan structure and administration.” Id., at 721. In the light of its conclusion that the surcharge statutes were not otherwise saved by any applicable exception, the court held them pre-empted. Id., at 723. It recognized the apparent conflict between its conclusion and the decision of the Third Circuit in United Wire, Metal and Machine Health and Welfare Fund v. Morristown Memorial Hosp., 995 F. 2d 1179, 1191, cert. denied, 510 U. S. 944 (1993), which held that New Jersey’s similar ratesetting statute “does not relate to the plans in a way that triggers ERISA’s preemption clause.” See 14 F. 3d, at 721, n. 3. We granted certiorari to resolve this conflict, 513 U. S. 920 (1994), and now reverse and remand.
II
Our past cases have recognized that the Supremacy Clause, U. S. Const., Art. VI, may entail pre-emption of state law either by express provision, by implication, or by a conflict between federal and state law. See Pacific Gas & Elec. Co. v. State Energy Resources Conservation and Development Comm'n, 461 U. S. 190, 203-204 (1983); Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947). And yet, despite the variety of these opportunities for federal preeminence, we have never assumed lightly that Congress has derogated state regulation, but instead have addressed claims of pre-emption with the starting presumption that Congress does not intend to supplant state law. See Maryland v. Louisiana, 451 U. S. 725, 746 (1981). Indeed, in cases like this one, where federal law is said to bar state action in fields of traditional state regulation, see Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S. 707, 719 (1985), we have worked on the “assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” Rice, supra, at 230. See, e. g., Cipollone v. Liggett Group, Inc., 505 U. S. 504, 516 (1992); id., at 532-533 (Blackmun, J., concurring in part, concurring in judgment in part, and dissenting in part); Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 740 (1985); Jones v. Rath Packing Co., 430 U. S. 519 (1977); Napier v. Atlantic Coast Line R. Co., 272 U. S. 605, 611 (1926).
Since pre-emption claims turn on Congress’s intent, Cipollone, supra, at 516; Shaw, supra, at 95, we begin as we do in any exercise of statutory construction with the text of the provision in question, and move on, as need be, to the structure and purpose of the Act in which it occurs. See, e. g., Ingersoll-Rand, supra, at 138. The governing text of ERISA is clearly expansive. Section 514(a) marks for preemption “all state laws insofar as they . . . relate to any employee benefit plan” covered by ERISA, and one might be excused for wondering, at first blush, whether the words of limitation (“insofar as they ... relate”) do much limiting. If “relate to” were taken to extend to the furthest, stretch of its indeterminacy, then for all practical purposes pre-emption would never run its course, for “[rjeally, universally, relations stop nowhere,” H. James, Roderick Hudson xli (New York ed., World’s Classics 1980). But that, of course, would be to read Congress’s words of limitation as mere sham, and to read the presumption against pre-emption out of the law whenever Congress speaks to the matter with generality. That said, we have to recognize that our prior attempt to construe the phrase “relate to” does not give us much help drawing the line here.
In Shaw, we explained that “[a] law ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.” 463 U. S., at 96-97. The latter alternative, at least, can be ruled out. The surcharges are imposed upon patients and HMO’s, regardless of whether the commercial coverage or membership, respectively, is ultimately secured by an ERISA plan, private purchase, or otherwise, with the consequence that the surcharge statutes cannot be said to make “reference to” ERISA plans in any manner. Cf. Greater Washington Bd. of Trade, 506 U. S., at 130 (striking down District of Columbia law that “specifically refers to welfare benefit plans regulated by ERISA and on that basis alone is pre-empted”). But this still leaves us to question whether the surcharge laws have a “connection with” the ERISA plans, and here an uncritical literalism is no more help than in trying to construe “relate to.” For the same reasons that infinite relations cannot be the measure of pre-emption, neither can infinite connections. We simply must go beyond the unhelpful text and the frustrating difficulty of defining its key term, and look instead to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive.
A
As we have said before, § 514 indicates Congress’s intent to establish the regulation of employee welfare benefit plans “as exclusively a federal concern.” Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504, 523 (1981). We have found that in passing § 514(a), Congress intended
“to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government..., [and to prevent] the potential for conflict in substantive law ... requiring the tailoring of plans and employer conduct to the peculiarities of the law of each jurisdiction.” Ingersoll-Rand, 498 U. S., at 142.
This objective was described in the House of Representatives by a sponsor of the Act, Representative Dent, as being to “eliminate] the threat of conflicting and inconsistent State and local regulation.” 120 Cong. Rec. 29197 (1974). Senator Williams made the same point, that “with the narrow exceptions specified in the bill, the substantive and enforcement provisions . . . are intended to preempt the field for Federal regulations, thus eliminating the threat of conflicting or inconsistent State and local regulation of employee benefit plans.” Id., at 29933. The basic thrust of the pre-emption clause, then, was to avoid a multiplicity of regulation in order to permit the nationally uniform administration of employee benefit plans.
Accordingly in Shaw, for example, we had no trouble finding that New York’s “Human Rights Law, which prohibited] employers from structuring their employee benefit plans in a manner that discriminate^] on the basis of pregnancy, and [New York’s] Disability Benefits Law, which require[d] employers to pay employees specific benefits, clearly ‘relate[d] to’ benefit plans.” 463 U. S., at 97. These mandates affecting coverage could have been honored only by varying the subjects of a plan’s benefits whenever New York law might have applied, or by requiring every plan to provide all beneficiaries with a benefit demanded by New York law if New York law could have been said to require it for any one beneficiary. Similarly, Pennsylvania’s law that prohibited “plans from . . . requiring reimbursement [from the beneficiary] in the event of recovery from a third party” related to employee benefit plans within the meaning of § 514(a). FMC Corp. v. Holliday, 498 U. S. 52, 60 (1990). The law “prohibited] plans from being structured in a manner requiring reimbursement in the event of recovery from a third party” and “require[d] plan providers to calculate benefit levels in Pennsylvania based on expected liability conditions that differ from those in States that have not enacted similar antisubrogation legislation,” thereby “frustrat[ing] plan administrators’ continuing obligation to calculate uniform benefit levels nationwide.” Ibid. Pennsylvania employees who recovered in negligence actions against tortfeasors would, by virtue of the state law, in effect have been entitled to benefits in excess of what plan administrators intended to provide, and in excess of what the plan provided to employees in other States. Along the same lines, New Jersey could not prohibit plans from setting workers’ compensation payments off against employees’ retirement benefits or pensions, because doing so would prevent plans from using a method of calculating benefits permitted by federal law. Alessi, supra, at 524. In each of these cases, ERISA pre-empted state laws that mandated employee benefit structures or their administration. Elsewhere, we have held that state laws providing alternative enforcement mechanisms also relate to ERISA plans, triggering pre-emption. See Ingersoll-Rand, supra.
B
Both the purpose and the effects of the New York surcharge statute distinguish it from the examples just given. The charge differentials have been justified on the ground that the Blues pay the hospitals promptly and efficiently and, more importantly, provide coverage for many subscribers whom the commercial insurers would reject as unacceptable risks. The Blues’ practice, called open enrollment, has consistently been cited as the principal reason for charge differentials, whether the differentials resulted from voluntary negotiation between hospitals and payers as was the case prior to the NYPHRM system, or were created by the surcharges as is the case now. See, e. g., Charge Differential Analysis Committee, New York State Hospital Review and Planning Council, Report (1989), reprinted in Joint Appendix in No. 93-7132 (CA2), pp. 702, 705, 706 (J. A. CA2); J. Corcoran, Superintendent of Insurance, Update of 1984 Position Paper of The New York State Insurance Department on Inpatient Reimbursement Rate Differential Provided Non-Profit Insurers 6-7 (1988) (J. A. CA2, at 699-700); R. Trussell, Prepayment for Hospital Care In New York State 170 (1958) (J. A. CA2, at 664) (Trussell); Thorpe, Does All-Payer Rate Setting Work? The Case of the New York Prospective Hospital Reimbursement Methodology, 12 J. Health Politics, Policy, & Law 391, 402 (1987). Since the surcharges are presumably passed on at least in part to those who purchase commercial insurance or HMO membership, their effects follow from their purpose. Although there is no evidence that the surcharges will drive every health insurance consumer to the Blues, they do make the Blues more attractive (or less unattractive) as insurance alternatives and thus have an indirect economic effect on choices made by insurance buyers, including ERISA plans.
An indirect economic influence, however, does not bind plan administrators to any particular choice and thus function as a regulation of an ERISA plan itself; commercial insurers and HMO’s may still offer more attractive packages than the Blues. Nor does the indirect influence of the surcharges preclude uniform administrative practice or the provision of a uniform interstate benefit package if a plan wishes to provide one. It simply bears on the costs of benefits and the relative costs of competing insurance to provide them. It is an influence that can affect a plan’s shopping decisions, but it does not affect the fact that any plan will shop for the best deal it can get, surcharges or no surcharges.
There is, indeed, nothing remarkable about surcharges on hospital bills, or their effects on overall cost to the plans and the relative attractiveness of certain insurers. Rate variations among hospital providers are accepted examples of cost variation, since hospitals have traditionally “attempted to compensate for their financial shortfalls by adjusting their price . . . schedules for patients with commercial health insurance.” Thorpe, 12 J. Health Politics, Policy, & Law, at 394. Charge differentials for commercial insurers, even prior to state regulation, “varied dramatically across regions, ranging from 13 to 36 percent,” presumably reflecting the geographically disparate burdens of providing for the uninsured. Id., at 400; see id., at 398-399; see also, e. g., Trussell 170 (J. A. CA2, at 664); Bobinski, Unhealthy Federalism: Barriers to Increasing Health Care Access for the Uninsured, 24 U. C. D. L. Rev. 255, 267, and n. 44 (1990).
If the common character of rate differentials even in the absence of state action renders it unlikely that ERISA preemption was meant to bar such indirect economic influences under state law, the existence of other common state action with indirect economic effects on a plan’s costs leaves the intent to pre-empt even less likely. Quality standards, for example, set by the State in one subject area of hospital services but not another would affect the relative cost of providing those services over others and, so, of providing different packages of health insurance benefits. Even basic regulation of employment conditions will invariably affect the cost and price of services.
Quality control and workplace regulation, to be sure, are presumably less likely to affect premium differentials among competing insurers, but that does not change the fact that such state regulation will indirectly affect what an ERISA or other plan can afford or get for its money. Thus, in the absence of a more exact guide to intended pre-emption than § 514, it is fair to conclude that mandates for rate differentials would not be pre-empted unless other regulation with indirect effects on plan costs would be superseded as well. The bigger the package of regulation with indirect effects that would fall on the respondents’ reading of § 514, the less likely it is that federal regulation of benefit plans was intended to eliminate state regulation of health care costs.
Indeed, to read the pre-emption provision as displacing all state laws affecting costs and charges on the theory that they indirectly relate to ERISA plans that purchase insurance policies or HMO memberships that would cover such services would effectively read the limiting language in § 514(a) out of the statute, a conclusion that would violate basic principles of statutory interpretation and could not be squared with our prior pronouncement that “[p]re-emption does not occur ... if the state law has only a tenuous, remote, or peripheral connection with covered plans, as is the case with many laws of general applicability.” District of Columbia v. Greater Washington Bd. of Trade, 506 U. S., at 130, n. 1 (internal quotation marks and citations omitted). While Congress’s extension of pre-emption to all “state laws relating to benefit plans” was meant to sweep more broadly than “state laws dealing with the subject matters covered by ERISA[,] reporting, disclosure, fiduciary responsibility, and the like,” Shaw, 463 U. S., at 98, and n. 19, nothing in the language of the Act or the context of its passage indicates that Congress chose to displace general health care regulation, which historically has been a matter of local concern, see Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S., at 719; 1 B. Furrow, T. Greaney, S. Johnson, T. Jost, & R. Schwartz, Health Law §§ 1-6, 1-23 (1995).
In sum, cost uniformity was almost certainly not an object of pre-emption, just as laws with only an indirect economic effect on the relative costs of various health insurance packages in a given State are a far cry from those “conflicting directives” from which Congress meant to insulate ERISA plans. See 498 U. S., at 142. Such state laws leave plan administrators right where they would be in any case, with the responsibility to choose the best overall coverage for the money. We therefore conclude that such state laws do not bear the requisite “connection with” ERISA plans to trigger pre-emption.
C
This conclusion is confirmed by our decision in Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825 (1988), which held that ERISA pre-emption falls short of barring application of a general state garnishment statute to participants’ benefits in the hands of an ERISA welfare benefit plan. We took no issue with the argument of the Mackey plan’s trustees that garnishment would impose administrative costs and burdens upon benefit plans, id., at 831, but concluded from the text and structure of ERISA’s preemption and enforcement provisions that “Congress did not intend to forbid the use of state-law mechanisms of executing judgments against ERISA welfare benefit plans, even when those mechanisms prevent plan participants from receiving their benefits.” Id., at 831-832. If a law authorizing an indirect source of administrative cost is not pre-empted, it should follow that a law operating as an indirect source of merely economic influence on administrative decisions, as here, should not suffice to trigger pre-emption either.
The commercial challengers counter by invoking the earlier case of Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724 (1985), which considered whether a State could mandate coverage of specified minimum mental-health-care benefits by policies insuring against hospital and surgical expenses. Because the regulated policies included those bought by employee welfare benefit plans, we recognized that the law “directly affected” such plans. Id., at 732. Although we went on to hold that the law was ultimately saved from pre-emption by the insurance saving clause, § 514(b)(2)(A), 29 U. S. C. § 1144(b)(2)(A), respondents proffer the first steps in our decision as support for their argument that all laws affecting ERISA plans through their impact on insurance policies “relate to” such plans and are pre-empted unless expressly saved by the statute. The challengers take Metropolitan Life too far, however.
The Massachusetts statute applied not only to “ ‘[a]ny blanket or general policy of insurance ... or any policy of accident and sickness insurance’ ” but also to “ ‘any employees’ health and welfare fund which provide[d] hospital expense and surgical expense benefits.’” 471 U. S., at 730, n. 11. In fact, the State did not even try to defend its law as unrelated to employee benefit plans for the purpose of § 514(a). Id., at 739. As a result, there was no reason to distinguish
Question: What is the basis of the Supreme Court's decision?
A. judicial review (national level)
B. judicial review (state level)
C. Supreme Court supervision of lower federal or state courts or original jurisdiction
D. statutory construction
E. interpretation of administrative regulation or rule, or executive order
F. diversity jurisdiction
G. federal common law
Answer:
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songer_geniss
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A
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis. Consider the following categories: "criminal" (including appeals of conviction, petitions for post conviction relief, habeas corpus petitions, and other prisoner petitions which challenge the validity of the conviction or the sentence), "civil rights" (excluding First Amendment or due process; also excluding claims of denial of rights in criminal proceeding or claims by prisoners that challenge their conviction or their sentence (e.g., habeas corpus petitions are coded under the criminal category); does include civil suits instituted by both prisoners and callable non-prisoners alleging denial of rights by criminal justice officials), "First Amendment", "due process" (claims in civil cases by persons other than prisoners, does not include due process challenges to government economic regulation), "privacy", "labor relations", "economic activity and regulation", and "miscellaneous".
UNITED STATES of America, Appellee, v. Paul BAYKOWSKI, Jr., Appellant.
No. 79-1601.
United States Court of Appeals, Eighth Circuit.
Submitted Oct. 10, 1979.
Decided Feb. 20, 1980.
Rehearing and Rehearing En Banc Denied March 13, 1980.
James J. Knappenberger, Shaw, Howlett & Schwartz, Clayton, Mo., argued, for appellant; C. Clifford Schwartz, Clayton, Mo., on brief.
Evelyn M. Baker, Asst. U. S. Atty., St. Louis, Mo., argued, for appellee; Robert D. Kingsland, U. S. Atty., St. Louis, Mo., on brief.
Before LAY, Chief Judge, and HEA-NEY and HENLEY, Circuit Judges.
The Honorable Donald P. Lay became Chief Judge of the Eighth Circuit on January 1, 1980.
HENLEY, Circuit Judge.
Appellant Paul Baykowski, Jr. was convicted by jury in the United States District Court for the Eastern District of Missouri on two counts of a seven-count indictment which included charges against alleged co-conspirators Norman Owens, Linda Fay Owens, Raymond Bryan and William Politte as well as against Baykowski. The counts specifically charging Baykowski were Count II (conspiracy to knowingly transport stolen property in violation of 18 U.S.C. § 371); Count V (knowingly storing stolen property in violation of 18 U.S.C. § 2315); and Count VI (knowingly transporting stolen property in violation of 18 U.S.C. § 2314). The jury returned a verdict of guilty on Count II and Count V and not guilty on Count VI, and the court sentenced Baykowski to a total of twelve years imprisonment and fined him $10,000.00.
On appeal Baykowski argues that the trial court erred in (1) admitting a statement of a coconspirator in violation of standards set forth in United States v. Bell, 573 F.2d 1040 (8th Cir. 1978); (2) admitting evidence of prior crimes; and (3) denying his motions for judgment of acquittal. We affirm.
I
This case arises out of an alleged conspiracy to steal, transport and then sell over one million dollars worth of personal property. According to the government, from February, 1977 through December, 1977 a series of robberies took place in Jackson, Mississippi and surrounding areas. Because of the striking similarity of these robberies in terms of the time and mode of entry, property taken as well as ignored, and the condition of the dwellings following the break-ins, it is the theory of the government that these robberies were committed by the same person or group of persons. The government further theorizes that the goods acquired in the Mississippi robberies were subsequently transported and sold in and around St. Louis and that defendant Baykowski was connected with the conspiracy and knowingly transported and stored the stolen property. There was, however, no direct evidence proving Baykowski’s participation in this scheme and thus the government at trial focused to a large degree on establishing through circumstantial evidence that Baykowski did in fact commit the criminal acts in question.
The government first attempted to tie Baykowski to the conspiracy through the testimony of two desk clerks who worked at the Ramada Inn in Jackson, Mississippi. Both desk clerks testified that they recalled having seen the defendant Baykowski during the latter part of 1977 at the Jackson, Mississippi Ramada Inn. But other than their recollection that Baykowski was in Mississippi in the fall of 1977, neither clerk could offer other information which might connect Baykowski to the Jackson, Mississippi robberies.
The government additionally tried to show Baykowski’s involvement in the conspiracy and knowing participation in the scheme through the revelation that property taken from Mississippi was found in Baykowski’s van following his arrest.
Baykowski was arrested after the FBI set up a surveillance on December 14, 1977 at the Wood Hollow Apartments, a location where an FBI undercover agent, Donald H. Taylor, had previously purchased some stolen property traced to Mississippi ownership. Shortly after the surveillance began, the agents spotted one of the alleged coconspirators, Norman Owens, pulling into the apartment complex with a small U-Haul trailer attached to his car. In addition, a dark blue Ford Econoline van (the Baykowski van) also pulled into the complex. The two vehicles were parked next to each other and had been backed in towards an apartment. Eventually three men began unloading property from the U-Haul trailer. The FBI agents tried to arrest them but the three men ran into a nearby apartment, locked the door and closed the curtains. Some time later they escaped from the apartment complex undetected by the agents.
But after approximately twenty minutes an FBI agent saw two men at Denny’s Restaurant who resembled the two men who were helping Owens unload the U— Haul trailer at the apartment complex. The two men were Paul Baykowski and William Politte.
After arresting the men, the FBI agent searched the arrestees and discovered that Baykowski had on his person a set of keys. Later that night another FBI agent took the keys back to the Wood Hollow Apartments and found that one of the keys fit the van parked next to the U-Haul trailer. The agent inventoried the items in the van pursuant to a search warrant and discovered two large carpets and some chandeliers. The two large carpets in the van were stolen in Jackson, Mississippi on December 12, 1977. The agents also inventoried the goods in the Owens car and attached U-Haul as well as in the apartment, and many of these items were also traced to owners in Mississippi.
The government finally tried to establish Baykowski’s participation in the scheme through an out-of-court statement by co-conspirator Linda Fay Owens. This statement was directed to an undercover agent, Donald H. Taylor, after he had made numerous contacts with coconspirators Norman Owens and Raymond Bryan. Through these meetings, Taylor began to learn of the nature and scope of the conspiracy, as well as the identity of the coconspirators.
As early as September 19, 1977 Taylor was apprised of the fact that Raymond Bryan worked with one Norman Owens and that Owens in turn worked with a group of partners. Later, Taylor partially verified the names of these other participants in a meeting on December 20, 1977 with coconspirator Linda Fay Owens. At this meeting Taylor apparently wanted to buy some additional stolen merchandise from Norman Owens. Mrs. Owens, however, informed Taylor that her husband was not at home because his partners had been arrested. She also told Taylor that her husband’s partners were Paul and Bill. This was the first time Paul Baykowski’s name, or, for that matter, Bill Politte’s name, had been mentioned to FBI Agent Taylor by a coconspirator.
Following the close of the government’s case, Baykowski attempted to refute his seeming involvement in the scheme. Baykowski first tried to discredit the testimony of the two desk clerks from the Ramada Inn in Jackson, Mississippi who testified that they had seen Baykowski in Mississippi during the fall of 1977. Baykowski presented a number of witnesses including his wife, employer, and friend who testified that the defendant had remained in Granite City, Illinois (near St. Louis) for various periods of time in the latter part of 1977. Furthermore, Baykowski himself testified that he had never been to Mississippi.
Baykowski additionally tried to show that he was unaware of the conspiracy or of his participation in criminal activities. Baykowski testified that Bill Politte had called him on December 14 asking him to help move some items and that he agreed to help out. Baykowski stated, however, that at the time he moved the items from the U-Haul trailer to the van he did not know the goods were stolen. Although Baykowski conceded that he ran when the FBI agents appeared at the apartment complex, he asserted that the reason he ran along with the other coconspirators was because he had previously served time in prison.
Despite Baykowski’s testimony, the jury found him guilty of conspiracy to knowingly transport and store stolen property and knowingly storing stolen property.
II
On appeal Baykowski first claims that the district court erred by failing to follow United States v. Bell, supra, in determining the admissibility of an out-of-court declaration by an alleged coconspirator. Appellant notes that under Bell “an out-of-court statement is not hearsay and is admissible if on the independent evidence the district court is satisfied that it is more likely than not that the statement was made during the course and in furtherance of an illegal association to which the declarant and the defendant were parties.” Id. at 1044. In addition, appellant points out that Bell describes certain procedural steps which should be utilized in determining the admissibility of a coconspirator’s statement. Baykowski contends that the district court incorrectly applied both the procedural guidelines and substantive test enunciated in Bell. We do not agree.
We turn first to appellant’s “substantive” argument that the government did not adduce sufficient independent evidence that defendant was a member of a conspiracy to allow the admission of the out-of-court statement by Linda Fay Owens that her husband’s partners were Paul and Bill. Appellant asserts that the only independent evidence that the government offered showing Baykowski’s involvement in the conspiracy were the identification of the two hotel clerks from the Ramada Inn in Jackson, Mississippi and the testimony of FBI agents as to Baykowski’s activities on the date of his arrest. Noting that the statement of Linda Fay Owens cannot be considered in determining the admissibility of a coconspirator’s out-of-court statement, appellant complains that the independent evidence was insufficient to show by a preponderance his participation in the conspiracy.
We are unpersuaded by appellant’s argument and believe that substantial independent evidence was introduced by the government proving by a preponderance of the evidence defendant’s participation in the conspiracy. United States v. Milham, 590 F.2d 717, 723 (8th Cir. 1979). Most convincing is the fact that defendant Baykowski was arrested on December 14 while assisting conspirator William Politte and at the time of his arrest had on his person a key which fit the van from which several stolen items from Mississippi were recovered. Furthermore, employees at the Ramada Inn in Jackson, Mississippi testified that they had seen Baykowski at the Inn during the fall of 1977. We thus conclude that the district court properly determined that the government had proven by a preponderance of independent evidence that defendant participated in the conspiracy and that the statement was made in the course and in furtherance of the conspiracy.
We are also unconvinced by appellant’s argument that the district court committed reversible error in applying Bell’s procedural guidelines. Appellant argues that the district court failed to follow the Bell guidelines in two ways. First, appellant contends that under Bell the trial judge is to determine at the conclusion of all the evidence whether the government proved by a preponderance of the evidence that the statement was made by a coconspirator during the course and in furtherance of a conspiracy. Because the trial judge in the present case made this determination at the close of the government’s case in chief, appellant argues that the district court’s procedure did not comport with Bell and requires reversal. Appellant further claims that the trial judge erred in not providing an appropriate instruction as required by Bell cautioning the jury with regard to the weight and credibility to be accorded a co-conspirator’s statement.
The procedural guidelines enunciated in Bell are “flexible and not infallible.” United States v. Littlefield, 594 F.2d 682, 686 (8th Cir. 1979). If, as in this case, the trial court did in fact comply with the substance of the procedural guidelines, we believe that a slight deviation which does not affect the substantial rights of the parties should not constitute grounds for reversal. Fed.R.Civ.P. 61. With these standards in mind, we turn to examine appellant’s contention of error under the Bell procedural guidelines.
As to appellant’s contention that the trial court erred in determining the admissibility of the coconspirator’s statement at the close of the government’s case in chief instead of at the close of all evidence, we observe that the trial court did substantially comply with the Bell procedure. In accordance with Bell, the district court conditionally admitted the declaration of the alleged coconspirator after timely and appropriate objection by the defense and cautioned the parties after excusing the jurors that the government was required to prove by a preponderance of independent evidence that the statement was made by the coconspirator during the course and in furtherance of the conspiracy. Although the court did not precisely follow Bell in determining at the end of the government’s case if the coconspirator’s statement should be admitted, we believe that this error did not affect the substantial rights of the parties. We note that defendant could have objected to the court’s determination of admissibility of the coconspirator’s statement at the close of all the evidence, and the court undoubtedly would have reconsidered the question of admissibility. The defendant, however, chose not to exercise this option.
We also are not convinced that the district court’s failure to follow the Bell procedural guidelines of providing an instruction cautioning the jurors about the weight and credibility to be accorded a co-conspirator’s statement after admitting the out-of-court declaration under Fed.R.Evi. 801(d)(2)(E) constituted reversible error.
Although we do not approve of the trial court’s failure to follow this procedural guideline established in Bell, we note that the defendant did not object to the jury instruction at trial. When an appellant raises an objection as to jury instructions for the first time on appeal, this court has held in accord with Fed.R.Crim.P. 30 that the “objection comes too late to preserve the alleged error on appeal,” Kropp v. Ziebarth, 601 F.2d 1348, 1355 (8th Cir. 1979), unless the error affected the substantial rights of the parties and thus constitutes plain error. Fed.R.Crim.P. 52(b); United States v. Robinson, 539 F.2d 1181 (8th Cir. 1976), cert. denied, 429 U.S. 1101, 97 S.Ct. 1124, 51 L.Ed.2d 550 (1977). Since the trial judge did provide a general cautionary instruction, we are unwilling to hold that the district court’s failure to follow the Bell procedural guideline amounted to plain error necessitating a reversal.
Ill
Appellant’s next argument is that the trial court erred in admitting certain testimony of detective James McMillan of the Jackson, Mississippi Police Department regarding the pattern of break-ins in Jackson, Mississippi and surrounding areas because this evidence of prior crimes or acts was used to show appellant’s character and that he acted in conformity with his character.
The argument has no merit. Although Federal Rule of Evidence 404(b) provides that evidence of prior crimes or acts is not admissible to prove the bad character of the defendant, such evidence may be admitted for other purposes such as proof of notice, identity, a common scheme, United States v. Goehring, 585 F.2d 371 (8th Cir. 1979), or proof of an element of the crime. United States v. Etley, 574 F.2d 850 (5th Cir.), cert. denied, 439 U.S. 967, 99 S.Ct. 458, 58 L.Ed.2d 427 (1978).
In the present case, the evidence was clearly used to show a common scheme — that the items stolen in Mississippi were transported through interstate commerce to Missouri and Illinois — as well as to prove elements of various counts of the indictment. Thus, the evidence was clearly admissible under the Federal Rules of Evidence.
IV
Appellant finally argues that the government did not prove beyond a reasonable doubt that he was a knowing and willing member of a conspiracy.
Again, we are unpersuaded. In reviewing a jury’s findings of guilt in a criminal case, we are required to consider the evidence in the light most favorable to the government and accept as established all reasonable inferences to support the conviction. United States v. Rich, 518 F.2d 980 (8th Cir. 1975), cert. denied, 427 U.S. 907, 96 S.Ct. 3193, 49 L.Ed.2d 1200 (1976). So considered, we believe that the government carried its burden.
We have noted that two desk clerks at the Ramada Inn in Jackson, Mississippi testified that the defendant had been in Jackson, Mississippi at the time of a number of break-ins and that appellant was arrested while helping other conspirators unload stolen property from the Baykowski van. Taking this evidence along with the other evidence proffered by the government, in the light most favorable to the appellee, we are convinced that the jury was fully warranted in finding beyond a reasonable doubt that the defendant was a knowing and willing member of the conspiracy to transport and to store stolen property and that he was guilty as charged.
Affirmed.
. More specifically, Baykowski was sentenced to a four year prison term on Count II and an eight year prison term on Count V to run consecutively. Baykowski was also fined $5,000.00 on each count for a total of $10,-000.00.
. The van apparently was owned by Baykowski’s wife, Barbara Baykowski. Defendant Baykowski, however, was driving the van on the day of his arrest.
. Although the First Circuit has recently suggested in dictum that a trial judge may consider the out-of-court statement itself in determining its admissibility under Federal Rule of Evidence 104(b), United States v. Martorano, 557 F.2d 1, 11-12 (1st Cir. 1977), cert. denied, 435 U.S. 922, 98 S.Ct. 1484, 55 L.Ed.2d 515 (1978), this court has adhered to the requirement that the trial court only consider independent evidence of the conspiracy. See, e. g., United States v. Macklin, 573 F.2d 1046 (8th Cir.), cert. denied, 439 U.S. 852, 99 S.Ct. 160, 58 L.Ed.2d 157 (1978).
. The trial judge stated:
You are the sole judge of the credibility of the witnesses and of the weight and value to be given to their testimony, as well as to all of the evidence and facts and circumstances which have been presented in this trial. In weighing, analyzing and reconciling the testimony, you should consider the demeanor and manner of the witness, his candor and attitude on the witness stand, his interest or lack of interest in the case and its outcome, the relationship he may bear to any of the parties to the case, the means of knowledge or lack of knowledge of the facts about which such witness testifies and his opportunity to know such facts, the reasonableness of the witness’s testimony and its probability or improbability, and the extent to which such witness has been corroborated or contradicted, if at all, by other credible evidence.
. Rule 404(b) provides:
(b) Other crimes, wrongs, or acts. Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.
Question: What is the general issue in the case?
A. criminal
B. civil rights
C. First Amendment
D. due process
E. privacy
F. labor relations
G. economic activity and regulation
H. miscellaneous
Answer:
|
songer_procedur
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the interpretation of federal rule of procedures, judicial doctrine, or case law, and if so, whether the resolution of the issue by the court favored the appellant.
STERLING DRUG INC. et al., Petitioners, v. Caspar W. WEINBERGER, Secretary of Health, Education and Welfare, and Alexander M. Schmidt, Commissioner of Food and Drugs, Respondents.
Nos. 623, 624, Dockets 73-1628, 73-2481.
United States Court of Appeals, Second Circuit.
Argued Feb. 1, 1974.
Decided May 2, 1974.
Memorandum Oct. 9, 1974.
William F. Weigel, New York City (James B. Swire, E. Carrington Bog-gan, Rogers, Hoge and Hills, New York City; James H. Luther, Jr., Roger M. Rodwin, of counsel), for Sterling Drug Inc.
Robert V. Allen, Dept, of Justice, Washington, D. C. (Howard S. Epstein, Asst. Chief, Consumer Affairs Section, Dept, of Justice, on the brief), for respondents.
Before MULLIGAN and WATERMAN, Circuit Judges, and BRYAN, District Judge.
Frederick van Pelt Bryan, of the Southern District of New York, sitting by designation.
FREDERICK van PELT BRYAN, District Judge:
In these consolidated appeals, Sterling Drug Inc. and its subsidiaries Winthrop Products, Inc. and Breon Laboratories, Inc. petition to set aside two orders of the Commissioner of Food and Drugs, dated March 2, 1973 and August 7, 1973. The orders, issued under the 1962 amendments to the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., denied petitioners’ requests for a hearing and withdrew prior approval of new drug applications for petitioners’ product, Alevaire, alleging lack of substantial evidence that the drug was effective for its recommended uses.
Alevaire is an aerosol prescription drug administered to patients with chronic respiratory diseases, to aid in the evacuation of mucous from the lungs. Alevaire is a solution of 0.125% tyloxapol, 2% sodium bicarbonate, 5% glycerine, and 92.875% water. Tyloxa-pol is described as the “active” muco-evacuant agent, while glycerine is a “stabilizer” and sodium bicarbonate acts to adjust the “pH factor” (alkalinity and acidity) in the lungs.
I.
Proceedings Before the FDA
Under the Federal Food, Drug and Cosmetic Act of 1938, no drug may be introduced into interstate commerce unless a New Drug Application (NDA), filed with the Food and Drug Administration (FDA), is in effect. The Act established procedures under which, after notice and hearing, the FDA could refuse to permit an NDA to go into effect or withdraw prior approval on the basis of evidence that the drug was unsafe for its intended use.
In 1962, the 1938 Act was amended to provide that the FDA could disapprove or withdraw prior approval of NDA’s, not only on evidence that the drug was unsafe for intended use but also if substantial evidence is lacking that the drug is effective for its intended use. Substantially the same requirements for notice and hearing are provided.
Pursuant to the Act, as amended, the FDA undertook the review of marketed drugs, including those for which NDA’s were in effect, for their therapeutic effectiveness. To aid it in this task, the FDA retained the National Academy of Sciences-National Research Council (NAS-NRC) to review the effectiveness for intended use of each approved drug.
NDA’s for Alevaire had been approved by the FDA in 1952, when only the safety factor was controlling. On July 17, 1968 the FDA notified petitioners that the NAS-NRC had reported that it rated Alevaire as “ineffective” and that the FDA concurred in that conclusion. Petitioners were advised that the FDA intended to institute proceedings to withdraw the approval previously given to petitioners’ NDA’s for Alevaire.
Pursuant to 21 U.S.C. § 355(e), formal “Notice of Opportunity for Hearing” was given to petitioners on December 1, 1969. The notice, after reference to the NAS-NRC report, advised petitioners that the FDA proposed to issue an order withdrawing approval of the NDA’s for Alevaire “on the grounds that there is a lack of substantial evidence that Alevaire has the effect which it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling thereof.” It further advised petitioners of their right to avail themselves of an opportunity for a hearing and to submit clinical and investigational data to show they were entitled to a hearing.
Under the FDA regulations, 21 C.F.R. 130.14(b), a hearing can be denied only if the petitioners fail to submit at least some evidence of the drug’s effectiveness stemming from adequate and well-controlled clinical investigations, 21 C.F.R. 130.12(a)(5)(ii). Petitioners duly submitted a written appearance requesting a hearing pursuant to 21 C.F.R. 130.14(b) together with a mass of evidence in support of the effectiveness of Alevaire. Petitioners’ submissions as to the effectiveness of Ale-vaire, in addition to contentions that the NAS-NRC report was mistaken in major respects, relied principally on two clinical studies made by physicians whose qualifications in this field were never questioned. These studies were primarily directed at the basic criticism in the NAS-NRC report that “This product is no more effective than water”. The first clinical study, by Doctors Miller and Paez (the Miller-Paez Study) concluded that Alevaire was effective as a muco-evacuant and superior to both water and saline. The other, by Dr. Cohen (the Cohen Study) compared Alevaire with water and concluded that Alevaire was a superior and effective muco-evacuant.
These studies were supported by affidavits from 10 physicians, knowledgeable and experienced in the field, that the Miller-Paez and Cohen Studies were “adequate and well-controlled” within the FDA requirements and established the effectiveness of Alevaire as a muco-evac-uant.
In addition, petitioners submitted affidavits from six physicians based on their own extensive clinical experience with Alevaire to the effect that the drug was effective, and more effective than the commonly used agents of water and saline, and summaries of some 150 articles in medical and scientific literature commenting favorably on Alevaire and its use as a muco-evacuant.
On August 27, 1971, the FDA issued an order denying the petitioners’ request for a hearing and withdrawing approval of petitioners’ NDA’s for Alevaire, primarily on the ground that the Miller-Paez and Cohen clinical studies were “not adequate and well-controlled”.
The petitioners thereupon filed an appeal from the order in this Court (Docket No. 71-1898) and filed their printed briefs and appendix. At that point the FDA terminated its August 27, 1971 order and moved in this Court to remand, conceding that it had failed to consider relevant material in petitioners’ submissions. It agreed to reconsider petitioners’ request for a hearing. The FDA’s motion to remand was granted by this Court over petitioners’ opposition on January 11, 1972.
A series of conferences and communications between the petitioners and the FDA ensued. On March 2, 1973, some 14 months after the petition to remand the first appeal had been granted, the FDA issued a second order again denying petitioners a hearing and withdrawing approval of the NDA’s for Alevaire.
Denial of the hearing was again based upon the ground that the Miller-Paez and Cohen studies were not adequate and well-controlled under the standards of 21 C.F.R. 130.12(a)(5)(ii). For the first time, the criticism was also voiced that water was not a proper “control” with which to compare Alevaire, but that the proper “control” was Ale-vaire minus tyloxapol.
On April 16, 1973, the petitioners requested the FDA to reconsider its March 2 order. They submitted to the FDA an extensive rebuttal of the grounds on which the order was based, which, in the light of subsequent events, was apparently well taken.
The petitioners also appealed to this Court seeking to set side the March 2, 1973 order (Docket No. 73-1628). On June 14, 1973, when its time to file the record was about to expire, the FDA terminated its March 2 order and reinstated its approval of the NDA’s for Al-evaire. The order of termination stated that upon reviewing the petition for reconsideration, the FDA had concluded that the requests for a hearing should be reevaluated. The FDA also moved to dismiss the pending appeal from the March 2 order. The petitioners opposed that motion, asserting they were entitled to a decision in their favor on the merits.
Then, on August 7, 1973, before the FDA’s motion to dismiss the appeal from the March 2, 1973 order was argued, the FDA issued a third order denying a hearing and withdrawing approval of the petitioners’ NDA’s for Ale-vaire. This third order abandoned the grounds on which the prior two orders of March 2, 1973 and August 27, 1971 had been based. It advanced an apparently new ground for withdrawal which had never been previously raised. The ground now announced was that Ale-vaire was a “fixed combination” drug and that the only studies which could demonstrate its effectiveness were studies which assessed “the contribution each of the three components of Alevaire makes to the claimed effectiveness of the drug”. The Miller-Paez and Cohen Studies were rejected as irrelevant to this theory.
Petitioners appealed to this Court seeking to set aside the third order of August 7, 1973 (Docket No. 73-2481). The FDA’s motion to dismiss petitioners’ appeal from the March 2, 1973 order was denied on November 9, 1973, and the appeal from that order was consolidated with the appeal from the subsequent August 7, 1973 order.
II.
The March 2, 1973 Order
The appeal from the March 2, 1973 order denying a hearing and withdrawing approval of the Alevaire NDA’s is in a curious posture. Subsequent to the taking of the appeal, the March 2 order was terminated by the FDA’s order of June 14, 1973 which granted petitioners’ application for reconsideration of their requests for a hearing and reinstated approval of the Alevaire NDA’s.
The respondents’ brief states: “We confessed error in that order [of March 2, 1973] before this Court on November 9, 1973 and petitioners objected. We again confess error, with the hope that petitioners will not look a gift horse in the mouth a second time.”
Concededly erroneous though it was, and despite the continuing pendency of the appeal, the March 2 order is no longer in force and effect. We fail to see what relief could be granted to petitioners under these circumstances. The appeal from the March 2, 1973 order must be dismissed as moot.
III.
The August 7, 1973 Order
The questions raised on this appeal, therefore, center on the August 7, 1973 order. That order, for the first time in the lengthy and more than a little confused proceedings before the FDA characterized Alevaire as a “fixed combination drug”.
The fixed combination drug classification was established on October 5, 1971 by regulation 21 C.F.R. 3.86 (some three years after the Alevaire proceeding had been commenced), in pursuance of a policy formulated initially by the NAS-NRC Drug Efficacy Study of 1969.
A fixed combination drug is one which combines “two or more drugs in a single dosage form” intended for “concurrent therapy.” The NAS-NRC study explained the reasons for the classification as follows:
The rating “ineffective as a fixed-combination” was brought into use to deal rationally with certain combinations of drugs, notably combinations of two or more antibiotics, one or more of which when administered alone is acknowledged to be effective for the cited indication. It is a basic principle of medical practice that more than one drug should be administered for the treatment of a given condition only if the physician is persuaded that there is substantial reason to believe that each drug will make a positive contribution to the effect he seeks. Risks of adverse drug reactions should not be multiplied unless there be overriding benefit. Moreover, each drug should be given at the dose level that may be expected to make its optimal contribution to the total effect, taking into account the status of the individual patient and any synergistic or antagonistic effects that one drug may be known to have on the safety or efficacy of the other. On these grounds, multiple therapy using fixed dose ratios determined by the manufacturer and not by the physician is, in general, poor practice.
The August 7, 1973 order withdrew approval of Alevaire upon the ground that no studies had been submitted to show that Alevaire was effective as a fixed combination drug. It rejected the Miller-Paez and Cohen Studies, about which the controversy had revolved up to that time, as irrelevant, on the ground that they did not demonstrate the effectiveness of Alevaire in terms of the claimed contribution each component made to the drug’s effectiveness.
Petitioners contend that they were entitled to notice of the specific grounds on which the FDA proposed to withdraw approval of the NDA’s for Alevaire; that no notice was given them of the “fixed combination” grounds on which the August 7 order was based, and that they were therefore precluded from submitting evidence of the drug’s effectiveness which would meet the criticisms expressed, for the first time, in that order. Thus, they urge, they were denied the opportunity to show that they were entitled to a hearing under the procedure provided by the statute and the FDA’s own regulations.
The statute, 21 U.S.C. § 355(e), provides that “after due notice and opportunity for hearing” approval of an NDA may be withdrawn “on the basis of new information before [the FDA] with respect to such drug, evaluated together with the evidence available when the application was approved, that there is a lack of substantial evidence that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling thereof.”
The regulation, 21 C.F.R. 130.14(a), spells out the due notice requirement as follows: “The notice to the applicant of opportunity for a hearing on a proposal by the Commissioner ... to withdraw the approval of an application will specify the grounds upon which he proposes to issue his order.”
On June 18, 1973, between the FDA termination of its March 2, 1973 order on June 14, 1973 and the issuance of its August 7, 1973 order, the Supreme Court decided Weinberger v. Hynson, Westcott & Dunning, 412 U.S. 609, 93 S.Ct. 2469, 37 L.Ed.2d 207 (1973). In that case the Supreme Court held that 21 U.S.C. § 355(e) and 21 C.F.R. 130.14 set up a type of summary judgment procedure in FDA administrative proceedings for the denial of NDA approval or withdrawal of such approval.
What the agency has said, then, is that it will not provide a formal hearing where it is apparent at the threshold that the applicant has not tendered any evidence which on its face meets the statutory standards as particularized by the regulations. 412 U.S. at 620.
Thus, the FDA may withdraw a drug from the market without a hearing when, and only when, “it appears conclusively from the applicant’s ‘pleadings’ that the application cannot succeed.” Id. at 621.
Prior to the issuance of the August 7 order, the petitioners had submitted extensive evidence of Alevaire’s effectiveness as a muco-evacuant to rebut the contention in the FDA notice that Ale-vaire was no more effective than water. Faced with the question of whether petitioners were entitled to a hearing on that issue under the Weinberger standards, the FDA then shifted its grounds to the new fixed combination theory in its August 7 order. That order was predicated on the Notice of Opportunity for Hearing of December 1, 1969 which was the only notice ever given to petitioners. The notice, in turn, was based on the FDA announcement of July 9, 1968 stating that the FDA concurred in the report of the NAS-NRC drug efficacy study group that Alevaire was ineffective because it was “no more effective than water”. While some general language was used, this was the only specific ground stated on which the FDA proposed to withdraw approval of the NDA’s for the drug. It was to this ground that the Miller-Paez and Cohen Studies and the other material submitted by the petitioners were directed.
Until August, 1973, the FDA apparently agreed that this was the issue before it. The objection to petitioners’ submission raised by the FDA was that the studies were not “adequate and well-controlled”. Both of the prior withdrawal orders, of August 27, 1971 and March 2, 1973, which the FDA itself terminated after they had been appealed from, were predicated on that ground.
The August 7, 1973 order was the first time the fixed combination theory had been injected into the proceedings. There was no mention of that theory as a ground for proposed withdrawal in the Notice of Opportunity for Hearing of December 1, 1969. Petitioners were never given a meaningful opportunity to submit studies or data to contravene that theory. Instead, they were arbitrarily denied the opportunity to which they were entitled to establish their right to a hearing on that ground.
The FDA argues that even if its notice to petitioners failed to specify the fixed combination theory as a ground for proposed withdrawal, nevertheless, the petitioners should somehow have inferred this and submitted evidence rebutting that theory. The FDA refers to various isolated excerpts from the record, such as general references to the labeling of Alevaire, in the December 1, 1969 Notice of Opportunity for Hearing, and the reference in its order of March 2, 1973 (which order it conceded was erroneous and withdrew) to a lack of tests comparing Alevaire to Alevaire minus its therapeutic agent tyloxapol.
In the light of this lengthy and confused record, this argument is wholly unpersuasive. What the argument amounts to is this — the petitioners should somehow have guessed whatever grounds for withdrawal the FDA might eventually come up with and therefore specification of the grounds for the proposed withdrawal required by the statute and regulation was unnecessary.
The petitioners were not required to indulge in such guesswork. They were entitled to notice of the specific grounds on which the FDA proposed to withdraw approval of the Alevaire NDA’s and to an opportunity to submit evidence which would entitle them to a hearing before an order of withdrawal could be validly issued. The order of August 7, 1973 denied a hearing and withdrew approval of Alevaire without such notice to petitioners and without giving them an opportunity for such submission. Viewed in the light of the extended prior proceedings and the two prior orders of withdrawal without a hearing on quite different grounds, terminated by the FDA only after petitioners had appealed to this Court, it is apparent that the FDA arbitrarily disregarded the requirements of the statute and its own regulations. The order of August 7, 1973 is invalid and must be set aside and the original approval of the NDA’s for Alevaire reinstated.
A similar result was reached by the District of Columbia Circuit in Hess & Clark v. Food and Drug Administration, 495 F.2d 975 (D.C.Cir.1974.)
Hess & Clark involved the procedures for withdrawal of approval of New Animal Drug Applications (NADA’s) under 21 U.S.C. § 360(b) and (e) and 21 C.F.R. 135.15 which parallel the provisions of 21 U.S.C. § 355(e) and- 21 C.F.R. § 130.14, applicable in the case at bar. On June 21, 1972 the FDA issued a Notice of Opportunity for Hearing specifying certain tests as the grounds for proposed FDA withdrawal of NADA’s for the drug diethylstilbestrol (DES) when used in the form of implanted pellets. The applicants requested a hearing and submitted evidence directed to the grounds specified in the notice. On June 27, 1973, without further notice, the FDA issued an order denying a hearing and withdrawing approval of the NADA’s for DES when so used. The order was based on a new test which first came to light in April, 1973 and was quite different from the tests which had been specified as the basis for proposed withdrawal in the Notice of Opportunity for Hearing. The applicants appealed from that order. The court pointed out:
[W]here the case is governed by a statutory requirement for hearing (there being no imminent hazard to health), that hearing is not to be denied in the absence of a fair opportunity to identify material issues that require a hearing, an opportunity that embraces a suitable notice of the basis on which the agency proposes to act summarily.
It held that the FDA had not given to the DES applicant notice specifying the nature of the facts and evidence on which it proposed to withdraw NADA approval, as required by the FDA summary judgment procedures; that the applicant had thereby been deprived of the opportunity to controvert the alleged facts and present material issues which would entitle it to a hearing; and that therefore the order withdrawing approval of the NADA’s for DES without a hearing was invalid. The order of withdrawal was set aside and the NADA approval which the order had attempted to withdraw was reinstated.
In the case at bar, the August 7, 1973 order withdrawing approval of Alevaire without a hearing likewise is fatally defective.
IV.
The Adequacy of the Fixed-Combination Ground
Petitioners also contend that the record demonstrates that Alevaire is not a “fixed combination” drug and therefore not subject to the rating “ineffective as a fixed combination” applied to it by the order of August 7, 1973. Petitioners urge that this Court so hold.
While there is little in the record now before us to support the proposition that Alevaire is a fixed combination drug within the meaning of 21 C.F.R. 3.86, it is not for this Court to pass on the question on this appeal. If the FDA proposes to withdraw approval of the NDA’s for Alevaire on the ground that it is ineffective as a fixed combination drug, it must follow the procedure required by the statute and regulations. It must give the petitioners notice of the specific grounds proposed for withdrawal, an opportunity to present evidence showing that they are entitled to a hearing, and a hearing if that is shown to be required. The FDA may then determine the question on a full and proper record, subject, of course, to petitioners’ right of appeal to this Court from an adverse determination.
The order of August 7, 1973 is set aside and the prior approval of the New Drug Applications for Alevaire by the FDA is reinstated. The appeal from the order of March 2, 1973 is dismissed as moot.
MOTION TO PUBLISH NOTICE OF REINSTATEMENT OF NEW DRUG APPLICATIONS
PER CURIAM:
Petitioners have moved for an order directing respondents (1) to publish notice of reinstatement of approval of the New Drug Applications for Alevaire in the Federal Register and (2) to remove a listing of Alevaire as “ineffective” from the “FDA Interim Index To Evaluations Published In The Federal Register For NAS-NRC Reviewed Drugs.”
Since the motion was made, the FDA has issued and published in the Federal Register a new “Notice of Opportunity for Hearing” on a proposal withdrawing approval of New Drug Applications for Alevaire, as it was permitted to do by our decision of May 2, 1974. The notice makes specific reference to that decision. The first branch of petitioners’ motion is denied.
The nature of the FDA Interim Index and the basis on which listings thereon are made were not before us and were not explored on the appeal. We did not pass on the propriety of the listing of Alevaire on that Index, either in footnote 14 of the opinion or otherwise. The second branch of petitioner’s motion is.denied without prejudice to such other remedies as may be available to the petitioners.
. The appeals are taken pursuant to 21 U.S. C. § 355(h).
. The NAS-NRC report stated that, “The clinical impression of the Panel is that this product is no more effective than water.”
The FDA’s notification included the following : “The Academy [the NAS-NRC] reports that . . . [Alevaire is] ineffective in that there is no evidence that tyloxapol . . . has any effect on secretions in the lung other than that of water in thinning secretions by simple dilution.” There was no question raised as to the safety of Alevaire nor has there been at any time; only the effectiveness of the drug for intended use has been questioned.
. 21 U.S.C. § 355(e) provides, in relevant part:
The Secretary shall, after due notice and opportunity for hearing to the applicant, withdraw approval of an application with respect to any drug under this section if the Secretary finds .
(3) on the basis of new information before him with respect to such drug, evaluated together with the evidence available to him when the application was approved, that there is a lack of substantial evidence that the drug will have the effect it pur-I>orts or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling thereof.
The authority in the Secretary (of Health, Education and Welfare) has been duly delegated to the Commissioner of Food and Drugs. 21 C.F.R. 2.120.
. 21 C.F.R. 130.14(b) provides:
“If the applicant elects to avail himself of the opportunity for a hearing he is required to file a written appearance requesting the hearing within 30 days after the publication of the notice and giving the reason why the application should not be refused or should not be withdrawn, together with a well-organized and full-factual analysis of the clinical and other in-vestigational data he is prepared to prove in support of his opposition to the notice of opportunity for a hearing. A request for a hearing may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine and substantial issue of fact that requires a hearing. When it clearly appears from the data in the application and from the reasons and factual analysis in the request for the hearing that there is no genuine and substantial issue of fact which precludes the refusal to approve the application or the withdrawal of approval of the application, e. g., no adequate and well-controlled clinical investigations to support the claims of effectiveness have been identified, the Commissioner will enter an order on this data, making findings and conclusions on such data. If a hearing is requested and is justified by the applicant’s response to the notice of a hearing, the issues will be defined, a hearing examiner will be named, and he shall issue a written notice of the time and place at which the hearing will commence, not more than 90 days after the expiration of such 30 days unless the hearing examiner and the applicant otherwise agree in the case of denial of approval, and as soon as practicable in the case of withdrawal of approval.”
. 21 C.F.R. 130.12(a) (5) (ii) attempts to define “adequate and well-controlled” studies. Several criteria are enumerated in an effort to separate those studies that are scientifically acceptable from those that are not. Only studies which meet the standards particularized in this regulation are acceptable in determining whether there is substantial evidence to support the claims of effectiveness for any drug. See Weinberger v. Hynson, Westcott & Dunning, 412 U.S. 609, 617-619, 93 S.Ct. 2469, 37 L.Ed.2d 207 (1973).
. In other words, a solution of 2% sodium bicarbonate, 5% glycerine and 93% water. The FDA had previously suggested that either water or Alevaire minus tyloxapol would be a proper “control”.
. This included material supporting the suitability of the controls used in petitioners’ clinical studies under 21 C.F.R. 130.-12(a) (5) (ii) (a) (4) (iii).
. 21 C.F.R. 3.86 provides, in relevant part: The Food and Drug Administration’s policy in administering the new-drug, antibiotic, and other regulatory provisions of the Federal Food, Drug and Cosmetic Act regarding fixed combination dosage form prescription drugs for humans is as follows :
(a) Two or more drugs may be combined in a single dosage form when each component makes a contribution to the claimed effects and the dosage of each component (amount, frequency, duration) is such that the combination is safe and effective for a significant patient population requiring such concurrent therapy as defined in the labeling for the drug.
. The August, 1973 order stated, in relevant part:
In the petition for reconsideration filed by the NDA holders following publication of the March 8, 1973 notice, the NDA holders took issue with every facet of the evaluations of the Miller-Paez and Cohen studies contained in that notice.
The Commissioner finds that certain criticisms delineated in the petition are well-founded when the investigations are ae-cepted at face value as is required in ruling upon the adequacy of a request for hearing under 21 C.F.R. 130.12(a)(5) and 130.14. However, the Commission also finds that another analysis of these two studies, which would take into account the several valid objections made in the petition for reconsideration, would be a meaningless and unnecessary endeavor. Even assuming that the studies are adequate and well-controlled investigations comparing Alevaire with other control substances, a conclusion not warranted by analysis of the investigations, the studies cannot demonstrate the effectiveness of Alevaire because their design precludes assessments respecting the contribution each of the three components of Alevaire makes to the claimed effectiveness of the drug.
. See Note 3, supra.
. It should be noted here that the Commissioner was aware as early as August of 1968 that petitioners’ studies would compare Ale-vaire with water, and those studies were submitted by June of 1970.
. Withdrawal of NDA approval on the fixed combination theory has been upheld in several cases. However, in each of these cases petitioners were given notice of that theory and the opportunity to submit evidence to rebut it. Pfizer, Inc. v. Richardson, 434 F.2d 536 (2d Cir. 1970); Upjohn Co. v. Finch, 422 F.2d 944 (6th Cir. 1970); American Cyanimid Co. v. Richardson, 456 F.2d 509 (1st Cir. 1971). These cases serve to emphasize the importance of the notice requirement.
. As Mr. Justice Powell said in his concurrence in Weinberger v. Ilynson, Westcott & Dunning, supra:
The public interest is twofold: (i) to remove from the market, in accordance with due process, drugs of no utility or effectiveness; and (ii) to retain on the market those drugs that are efficacious. In an understandable zeal to remove the former, an administrative agency must not overlook both the interest of the public and the right of the proprietor in protecting the drugs that are useful in the prevention, control or treatment of illness.
412 Ü.S. at 639, n. 2.
. Petitioners claim that, despite the prior reinstatements of the NDA’s for Alevaire, the drug has remained on an FDA “ineffective list” throughout the course of these lengthy proceedings. If this be so, we think that the present reinstatement should have the effect of removing Alevaire from such an ineffective list, as well.
. Cooper Laboratories, Inc. v. Commissioner, Federal Food & Drug Administration 501 F.2d 772 (D.C.Cir. April 19, 1974) is not germane to the notice issue presented here.
Question: Did the interpretation of federal rule of procedures, judicial doctrine, or case law by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_appbus
|
0
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "private business and its executives". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Louis GOLDING, Appellant, v. UNITED STATES of America, Appellee.
No. 6896.
United States Court of Appeals, Fourth Circuit.
Argued Jan. 8, 1955.
Decided Feb. 7, 1955.
Buford T. Henderson, Wake Forest, N. C., for appellant.
Neil Brooks, Sp. Asst, to the Atty. Gen., Washington, D. C. (J. Stephen Doyle, Jr., Sp. Asst, to the Atty. Gen., Howard Rooney and Donald A. Campbell, Attys., U. S. Dept, of Agriculture, Washington, D. C., on brief), for appel-lee.
Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.
PER CURIAM.
This is an appeal from a judgment for penalties for violation of the Agricultural Adjustment Act of 1938, 7 U.S.C.A. § 1281 et seq. Appellant is a tobacco farmer who, because of his failure to report the disposition of his crops, had an acreage allotment of zero for the years 1950, 1951, 1952 and 1953. There was evidence which justified the findings of the court below that appellant raised and sold flue cured tobacco in the years in question in the amount found by the court. The penalty based on price was established by regulations contained in the Federal Register. Appellant complains of the refusal to continue the case, but this was clearly a matter resting in the discretion of the trial judge and there is no showing that the discretion was abused. He complains, also, because the court considered marketing quota regulations, which were contained in the Federal Register but were not introduced in evidence. It is clear, however, that the court could take judicial notice of these regulations. 44 U.S.C.A. § 307; Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10. There was no error and the judgment appealed from will be affirmed.
Affirmed.
Question: What is the total number of appellants in the case that fall into the category "private business and its executives"? Answer with a number.
Answer:
|
songer_circuit
|
E
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify the circuit of the court that decided the case.
UNITED STATES v. BURDEN, SMITH & CO.
Circuit Court of Appeals, Fifth Circuit.
June 22, 1929.
No. 5523.
William A. Bootle, U. S. Atty., of Maeon, Ga., D. A. Taylor, Sp. Atty., Burean of Int. Rev., of Washington, D. C. (C. M. Charest, Gen. Counsel, Bureau of Int. Rev., of Washington, D. C., on the brief), for the United States.
Geo. S. Jones and C. Baxter Jones, both of Maeon, Ga. (Jones, Jones & Johnston, of Maeon, Ga., and Charles M. Cork, of Maeon, Ga., on the brief), for appellee.
Before WALKER, BRYAN, and FOSTER, Circuit Judges.
FOSTER, Circuit Judge.
In this case the material facts stipulated by the parties and found by the District Court are these:
May 23, 1919, appellee made return for its 1918 taxes. August 30,1919, the Commissioner of Internal Revenue assessed their 1918 income and excess profits taxes at $48,-882.60. November 1, 1919, appellee filed a claim for abatement of $6,526.98, and January 28, 1920, made claim for a credit of $704.80, overpayment on its 1917 taxes. These two amounts, totaling $7,231.78, were deducted from the payment on account of the 1918 taxes. The claims for abatement and credit were rejected. On August 10, 1925, payment of $7,189.93 principal and $1,-006.59 interest was exacted by duress over appellee’s protest that it was not liable because the claim was barred by the statute of limitations. There was no agreement for a stay or suspension of payment. On these facts the District Court rendered judgment in fa/vor of appellee in the sum of $8,196.52.
Appellant concedes that the collection of the tax when made was barred by the statute of limitation in accordance with the opinion of the Supreme Court in Bowers v. New York & Albany Lighterage Co., 273 U. S. 346, 47 S. Ct. 389, 71 L. Ed. 676, and that prior to the passage of the revenue act of 1928, appellee could ha-ve maintained an action to recover the tax, but asserts that by reason of the provisions of sections 607, 611 of said act (26 USCA §§ 2607, 2611) the District Court erred in rendering judgment for appellee. These sections follow:
“See. 607. Effect of Expiration of Period of Limitation against United States.— Any tax (or any interest, penalty, additional amount, or addition to such tax) assessed or paid (whether before or after the enactment of this Act) after the expiration of the period of limitation properly applicable thereto shall be considered an overpayment and shall be credited or refunded to the taxpayer if claim therefor is filed within the period of limitation for filing such claim.”
“See. 611. Collections Stayed by Claim in Abatement. — If any internal-revenue tax (or any interest, penalty, additional amount, or addition to such tax) was, within the period of limitation properly applicable thereto, assessed prior to June 2, 1924, and if a claim in abatement was filed, with or without bond, and if the collection of any part thereof was stayed, then the payment of such part (made before or within one.year after the enactment of this Act) shall not be considered as an overpayment under the provisions of section 607, relating to payments made after the expiration of the period of limitation on assessment and collection.”
It is admitted that standing alone section 607 is in favor of appellee, but it is argued that section 611 must be given a retroactive effect in the sense that it refers to past transactions; that Congress intended the suspension of the statute of limitations as to every claim for abatement pending for adjustment where the assessment was made any time prior to June 2, 1924; and that to this end Congress used the word “stayed” in section 611 as synonymous with “delayed.” In support of this contention reliance is had on the report of the House Ways and Means Committee, No. 2, of the 70th Congress, First Session, presenting the bill.
It is unnecessary to quote the language of the report. Reports of committees of the House and Senate may be looked to as aids in construing ambiguous or conflicting terms of a statute, but they cannot be taken as giving it a meaning not fairly within its words. St. Louis, Iron Mountain & S. R. Co. v. Craft, 237 U. S. 648, 35 S. Ct. 704, 59 L. Ed. 1160.
Taxing statutes are to be interpreted liberally in favor of the taxpayer. Words of the statute are to be given their plain meaning. “Stayed,” in a legal sense, is not interchangeable with “delayed.” It connotes some act on the part of the taxpayer which would morally or legally tie the hands of the Commissioner and prevent collection of the tax. The mere filing of a claim for abatement without more could not possibly have that effect.
That the Treasury Department did not consider that the filing of a claim for abatement operated as a stay or prevented collection of the tax, prior to the adoption of the Act of 1928, is clearly shown by the provisions of article 1032 of regulations 62 of the Treasury Department, whieli is frankly quoted in the brief, as follows: “The filing of a elaim for abatement does not necessarily operate as a suspension of the collection of the tax or make it any less the duty of the collector to exercise due diligence to prevent the collection of the tax being jeopardized. He should, if he considers it necessary, collect the tax and leave the taxpayer to his remedy by a elaim for refund.”
Our attention has been called by appellant to the case of Huntley, Collector, v. H. S. Gile and W. T. Jenks, decided, since this case was submitted, by the Court of Appeals of the Ninth Circuit, May 27, 1929, 32 F.(2d) 857. That ease is not in point, as it was stipulated that collection of the tax had been stayed pending a decision by the Commissioner on a elaim for abatement.
We need not concern ourselves with the questions as to whether the above-quoted sections of the Revenue Act of 1928 have a retroactive effect and are constitutional as applied to this case. Giving them full effect the ease is with appellee. We concur in the conclusion of the District Court.
The record presents no reversible error.
Affirmed.
Question: What is the circuit of the court that decided the case?
A. First Circuit
B. Second Circuit
C. Third Circuit
D. Fourth Circuit
E. Fifth Circuit
F. Sixth Circuit
G. Seventh Circuit
H. Eighth Circuit
I. Ninth Circuit
J. Tenth Circuit
K. Eleventh Circuit
L. District of Columbia Circuit
Answer:
|
songer_state
|
24
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify the state or territory in which the case was first heard. If the case began in the federal district court, consider the state of that district court. If it is a habeas corpus case, consider the state of the state court that first heard the case. If the case originated in a federal administrative agency, answer "not applicable". Answer with the name of the state, or one of the following territories: District of Columbia, Puerto Rico, Virgin Islands, Panama Canal Zone, or "not applicable" or "not determined".
Merle BARTNICK, as Trustee for the Heirs and next of kin of Earl Prinsen, Deceased, Plaintiff-Appellant, v. READER COMPANY, INC., a Minnesota Corporation, et al., Defendants-Appellees.
Nos. 73-1461, 73-1622.
United States Court of Appeals, Eighth Circuit.
Dec. 3, 1973.
Timothy J. McCoy, Minneapolis, Minn., filed appendix and brief for appellant.
John C. DeMoss, Minneapolis, Minn., filed brief for appellees, Reader Company, Inc., and Robert D. Sargent.
Phillip A. Cole, Minneapolis, Minn., filed brief for appellee, Phillips Drill Co., Inc.
Before HEANEY, BRIGHT and ROSS, Circuit Judges.
PER CURIAM.
This appeal raises an issue of jurisdiction, which issue we deem appropriate for summary resolution under Rule 9(a) of the Rules of this Court. The record discloses that Merle Bartnick, a citizen of South Dakota, sues as trustee in a representative capacity for a widow and children, all citizens of Minnesota, and next of kin of Earl Prinsen, deceased, and seeks damages for the alleged wrongful death of decedent-Earl Prinsen. Plaintiff alleges jurisdiction resting on diversity of citizenship between the South Dakota trustee and the defendants, one of whom resides in Minnesota.
Here the trustee serves as a representative of living persons, i.e., the widow and next of kin of Earl Prinsen, deceased. See Minn.Stat.Ann. § 573.02 (Supp.1973). Under these circumstances, an appointment solely to create diversity jurisdiction will not be recognized by federal courts. The district court properly dismissed the action. This case is controlled by the principles enunciated in Rogers v. Bates, 431 F.2d 16, 18-22 (8th Cir. 1970). Cf. O’Brien v. Stover, 443 F.2d 1013, 1015-1016 (8th Cir. 1971).
(a) On The Motion Of The Court. The court may at any time, on its own motion and without notice, dispose of an appeal summarily, except that notice must be given if the appeal is in forma pauperis, a certificate of probable cause has been issued, and briefs have not been filed. The court may dismiss an appeal that is not within the jurisdiction of the court or that it finds to be frivolous and entirely without merit, or may affirm or reverse when the questions presented do not require further argument.
Affirmed.
. Rule 9(a) reads:
Question: In what state or territory was the case first heard?
01. not
02. Alabama
03. Alaska
04. Arizona
05. Arkansas
06. California
07. Colorado
08. Connecticut
09. Delaware
10. Florida
11. Georgia
12. Hawaii
13. Idaho
14. Illinois
15. Indiana
16. Iowa
17. Kansas
18. Kentucky
19. Louisiana
20. Maine
21. Maryland
22. Massachussets
23. Michigan
24. Minnesota
25. Mississippi
26. Missouri
27. Montana
28. Nebraska
29. Nevada
30. New
31. New
32. New
33. New
34. North
35. North
36. Ohio
37. Oklahoma
38. Oregon
39. Pennsylvania
40. Rhode
41. South
42. South
43. Tennessee
44. Texas
45. Utah
46. Vermont
47. Virginia
48. Washington
49. West
50. Wisconsin
51. Wyoming
52. Virgin
53. Puerto
54. District
55. Guam
56. not
57. Panama
Answer:
|
songer_dissent
|
0
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the number of judges who dissented from the majority (either with or without opinion). Judges who dissented in part and concurred in part are counted as dissenting.
Jess KRAFT and Barbara Kraft, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
No. 92-1552.
United States Court of Appeals, Sixth Circuit.
Argued March 5, 1993.
Decided and Filed April 7, 1993.
Richard A. Shapack (argued and briefed), Michael L. Geller (briefed), Shapack, McCullough & Kanter, Bloomfield Hills, MI, for plaintiffs-appellants.
Gary R. Allen, Acting Chief (briefed), Joan I. Oppenheimer (argued), Ann Belan-ger Durney, U.S. Dept, of Justice, Appellate Section Tax Div., Washington, DC, for defendant-appellee.
Before: MERRITT, Chief Judge; NELSON, Circuit Judge; and CONTIE, Senior Circuit Judge.
CONTIE, Senior Circuit Judge.
Jess and Barbara Kraft appeal the summary judgment dismissal of their 26 U.S.C. § 1341 claim for an income tax refund. For the following reasons, we affirm the district court’s summary judgment dismissal.
I.
Plaintiff-appellant Jess Kraft (“Kraft”), a licensed physician, practiced podiatry at Joel H. Haber, D.P.M., and Jess Kraft, D.P.M., P.C., a Michigan professional corporation (“the Corporation”), from December, 1973 through September, 1985. Kraft, at all relevant times, was an employee, officer, director, and 50% shareholder of the Corporation. The Corporation was not a Subchapter S corporation.
From 1981 through 1984, the Corporation billed Blue Cross/Blue Shield of Michigan (“Blue Cross”) approximately $2,245,000 for medical services performed by the Corporation. Once received, the Corporation included Blue Cross’ payments in its gross income. The Corporation, in turn, paid Kraft wages for the fiscal years ending August 31, 1980 ($231,000), August 31, 1981 ($235,000), August 31,1982 ($210,000), and August 31, 1983 ($249,000), which Kraft reported on the joint federal income tax returns he filed with his wife, plaintiff-appellant Barbara Kraft.
In September, 1984, a federal grand jury returned a 34-count Indictment charging Kraft with illegal distribution of controlled substances and mail fraud. Specifically, the Indictment alleged that Kraft performed unnecessary foot and toe surgeries on drug dealers and users by promising them Dilaudid, Percodan, and Demerol prescriptions. According to the Indictment, Kraft then submitted the bogus claims to Blue Cross which resulted in the wrongful payment of $84,160 to Kraft, though Blue Cross claims that Kraft actually defrauded it of $680,000, and Kraft claims that he “improperly billed” Blue Cross for only $19.
On or about April 3, 1985, the United States filed a one-count Information charging Kraft with mail fraud:
That beginning in or about January of 1981, and continuing up to in or about November, 1983, Dr. Jess Kraft, D.P.M., defendant herein, devised and intended to devise a scheme and artifice to defraud Blue Cross/Blue Shield of Michigan and to obtain money through the use of false, fictitious and fraudulent pretenses and representations in the manner and means as follows:
1. At all times pertinent to this information, Jess Kraft, D.P.M., was a licensed podiatrist and operated two facilities doing business as Dr. Joel Haber, D.P.M., and Dr. Jess Kraft, D.P.M., P.C.
2. It was a further part of the scheme and artifice that Dr. Kraft, D.P.M., billed and caused to be billed Blue Cross/Blue Shield of Michigan for services purportedly rendered to persons insured by Blue Cross/Blue Shield of Michigan, when in truth, and as the defendant Dr. Jess Kraft, D.P.M., well knew, the services had been performed on different persons not insured by Blue Cross/Blue Shield of Michigan.
That on or about August 13, 1983, in the Eastern District of Michigan, Southern Division, Jess Kraft, D.P.M., defendant herein, in furtherance of the aforesaid scheme and artifice to defraud and to obtain money by false and fraudulent representations, did cause to be placed in an authorized depository for mail, to be sent and delivered by the United States Postal Service, Blue Cross/Blue Shield of Michigan check number 008978836, in violation of Section 1341, Title 18, United States Code.
Information at 1-2.
On April 3, 1985, Kraft and the prosecutor executed a Rule 11 Plea Agreement (“Plea Agreement”) whereby Kraft agreed to plead guilty to Count Eleven of the Indictment (“Distribution and Aiding and Abetting in the Distribution of Dilaudid”) and Count One of the Information (“Mail Fraud”). In return, the government agreed: to dismiss the remaining counts in the Indictment; to not seek forfeiture of Kraft’s medical license; to limit Kraft’s sentence to 15 years for Count Eleven of the Indictment, and 5 years for Count One of the Information, to run concurrently. The Plea Agreement also provided that “Dr. Kraft agrees to pay Blue Cross/Blue Shield of Michigan $160,000 restitution pri- or to sentencing pursuant to the Victim-Witness Protection Act of 1982.” Rule 11 Plea Agreement at 2. On September 13, 1985, the district court sentenced Kraft to seven years imprisonment, and fined him $26,000.
On December 20, 1986, the Krafts filed Form 1040X ("Amended U.S. Individual Income Tax Return”) with the Internal Revenue Service (“IRS”) seeking a $78,688 tax refund for the 1985 tax year pursuant to Internal Revenue Code § 1341 (26 U.S.C. § 1341) which provides (in relevant part): § 1341. Computation of tax where taxpayer restores substantial amount held under claim of right.
(a) General rule. — If—
(1) an item was included in gross income for a prior taxable year (or years) because it appeared that the taxpayer had an unrestricted right to such item;
(2) a deduction is allowable for the taxable year because it was established after the close of such prior taxable year (or years) that the taxpayer did not have an unrestricted right to such item or to a portion of such item; and
(3) the amount of such deduction exceeds $3,000,
then the tax imposed by this chapter for the taxable year shall be the lesser of the following:
(4) the tax for the taxable year computed with such deduction; or (5) an amount equal to—
(A) the tax for the taxable year computed without such deduction, minus
(B) the decrease in tax under this chapter (or the corresponding provisions of prior revenue laws) for the prior taxable year (or years) which would result solely from the exclusion of such item (or portion thereof) from gross income for such prior taxable year (or years).
26 U.S.C. § 1341 (1988). The IRS denied the Krafts’ claim:
The claim of right has been disallowed since taxpayer knew at the time of filing the claim with Blue Cross and Blue Shield that he was not entitled to receive payment from the insurance company since wrong names were given to the company. Although the revenue ruling and court cases cited [above] deal mainly with embezzled funds, the facts clearly point that funds gained by wrongful or illegal means do not benefit from Section 1341 since the recipient knowingly accepted monies under false pretenses. Since the taxpayer submitted claims under false and fictitious individuals, he was aware that he had no “right” to the monies.
Another factor in considering Dr. Kraft’s case is the inclusion of the defrauded monies in income.
The payments went to the corporation of the doctor’s which he shared with another doctor. The funds were reported by the corporation and the taxpayer drew his salary from it. The possibility remains to exist that the corporation paid taxes on this money, the taxpayer received this money in his salary and the other doctor received this in his salary. There is no audit trail of these monies to determine who the recipient of the monies is.
Section 165(c)(2) does allow a deduction as a non-business loss [the] restitution [of] illegally or wrongfully obtained monies, not a business loss. Only business losses qualify under Section 172 to be carried back as a net operating loss. Since the taxpayers’ payment of the $160,000 would qualify as a non-business loss and not a business loss if allowed, the taxpayer is not entitled to claim a net operating loss back to 1981, 1982 and 1988 for the payback of funds to Blue Cross and Blue Shield.
Internal Revenue Service Form 886-A at 2-3.
The Krafts filed a second Form 1040X for 1985 seeking a $37,550.77 “ordinary and necessary trade or business expense” deduction, pursuant to 26 U.S.C. § 162(a), for legal fees paid defending against the criminal charges. The Internal Revenue Service denied this claim as well.
On November 27, 1990, the Krafts filed a Complaint against the United States in district court seeking a $91,301 income tax refund. Following cross-motions for summary judgment, the district court granted summary judgment to the United States with respect to Krafts’ 26 U.S.C. § 1341 claim ($78,688), and granted summary judgment to the Krafts with respect to their 26 U.S.C. § 162(a) “ordinary and necessary trade or business expense” claim ($12,613):
26 U.S.C. § 1341 provides a special method for computing tax liability in circumstances where a taxpayer received an amount of income under a claim of right, included that sum as income, and in a subsequent taxable year was required to restore that amount because it was established that the taxpayer did not in fact have an unrestricted right to such amount. For purposes of § 1341, income included under a claim of right means income included as part of gross income because it appeared from facts then available that the taxpayer had an unrestricted right to such income. The test for the application of § 1341 is whether the obligation to repay arose from the same circumstances, terms and conditions of the transaction whereby the amount was included in income. It is clear that plaintiff Kraft’s obligation to pay the $160,000 resulted from an obligation contained in a plea agreement. Moreover, we find that 26 U.S.C. § 1341 does not support plaintiffs’ claim to a deduction for the $160,000 because plaintiffs never made a claim of right to the money received from Blue Cross, a condition required under § 1341. Although Blue Cross made payments in Jess Kraft’s name, he immediately deposited the funds directly to his professional corporation. The corporation reported the Blue Cross payments as taxable income. Plaintiff elected to receive his taxable income from the professional corporation which co-mingled the Blue Cross payments with funds from other sources. Plaintiff never included the Blue Cross payments in his gross income. In other words, plaintiffs fail to meet the requirements for a deduction under § 1341 because plaintiffs’ obligation to make restitution to Blue Cross did not arise out of the same circumstances, terms and conditions of his receipt of taxable income from the corporation.
However, plaintiffs’ attorney fees incurred in the 1985 criminal action are deductible under 26 U.S.C. § 162(a). Attorney fees are deductible under § 162(a) if they relate to the conduct of the taxpayer’s business and the criminal charges are based upon the taxpayer’s business activities. Plaintiff was faced with a criminal indictment related to his business as a podiatrist. He had a constitutional right to defend himself by hiring legal counsel which resulted in the accumulation of attorney fees in the amount of $37,550.77. Such fees are deductible under 26 U.S.C. § 162(a).
District Court’s March 2,1992 Order at 3-4 (citations omitted).
The Krafts timely filed a notice of appeal challenging the district court’s 26 U.S.C. § 1341 “claim of right” determination. The United States has not appealed the district court’s 26 U.S.C. § 162(a) determination.
II.
Summary Judgment
Summary judgment is appropriate where “there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56. A district court’s grant of summary judgment is reviewed de novo. Pinney Dock & Transp. Co. v. Penn Cent. Corp., 838 F.2d 1445, 1472 (6th Cir.), cert. denied, 488 U.S. 880, 109 S.Ct. 196, 102 L.Ed.2d 166 (1988). In its review, this court must view all facts and inferences drawn therefrom in the light most favorable to the nonmoving party. 60 Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987).
The moving party has the burden of conclusively showing that no genuine issue of material fact exists. Id. Nevertheless, in the face of a summary judgment motion, the nonmoving party cannot rest on its pleadings but must come forward with some probative evidence to support its claim. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); 60 Ivy St. Corp., 822 F.2d at 1435.
“By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original). The dispute must be genuine and the facts must be such that if they were proven at trial, a reasonable jury could return a verdict for the nonmoving party. 60 Ivy St. Corp., 822 F.2d at 1435. If the disputed evidence “is merely color-able or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50, 106 S.Ct. at 2511 (citations omitted).
Dr. Kraft’s Claim Under 26 U.S.C. § mi
On appeal, the appellants maintain that they are entitled to recompute their 1985 tax liability pursuant to 26 U.S.C. § 1341:
The facts facing the district court on appellants’ motion for summary judgment fell squarely within the ambit [of] Section 1341. Appellants had received, under a claim of right, certain dollars, namely the $160,000 which Kraft later disgorged in restitution to Blue Cross. The amounts received by Kraft were included in appellants’ tax returns as income for the relevant years and the appropriate taxes were paid on those amounts. At all times, appellants believed, and it appeared that, they had an unrestricted right to the money. Subsequently, Kraft was required to restore the $160,000 of claimed (and previously taxed) income to Blue Cross in the form of a restitution payment of amounts Blue Cross claimed he did not have an unrestricted right to retain. This is a prime example of the scenario which Internal Revenue Code section 1341 is designed to encompass.
[T]he test applied to determine the applicability of Section 1341 is (i) whether the taxpayer had a subjective belief that he had an unrestricted right to the funds when they were received, and (ii) that the taxpayer establishes that he did not have an unrestricted right to the funds in the year of repayment. It is a simple straightforward test.
[T]he payment to Blue Cross clearly arose from the same circumstances, terms and conditions as the original receipt and inclusion of the income. Kraft initially received the monies from Blue Cross as a result of surgical and nonsurgical procedures performed on patients covered by Blue Cross. Kraft billed Blue Cross for these procedures. Blue Cross paid Kraft on these claims, which money was then funnelled through Kraft’s professional corporation and then repaid to Kraft in the form of salary. Blue Cross subsequently claimed that the monies paid to Kraft were paid under fraudulent conditions. As a result, [Dr. Kraft] agreed to repay $160,000 to Blue Cross. The repayment arose directly from the same services for which Kraft was initially paid. As such, Kraft clearly satisfies this aspect of the IRC § 1341 test.
Judge DeMascio erroneously found that because the funds were deposited by Kraft directly into the corporation where they were allegedly commingled with other funds of the corporation ... prior to disbursing to Kraft in the form of salary, that Kraft did not have a claim of right to those funds. Judge DeMascio then asserts that the corporation reported the money as income, not Kraft. However, this overlooks the true substance of the transaction and accepts the appellee’s “form over substance” argument. In reality, when Kraft reported the salary received from his professional corporation as income, and filed tax returns, he was, in actuality, reporting the money received from Blue Cross.
Appellants’ Brief at 8-15 (citations omitted).
In response, the United States argues: that Dr. Kraft’s restitution payment did not arise from the same circumstances, terms and conditions as Kraft’s original receipt of income; that Kraft may not disregard the tax disadvantages of the corporate entity; that funds obtained by fraud are not obtained under a “claim of right”; and, that Kraft may not deduct the $160,-000 payment under any other provision of the Internal Revenue Code (a prerequisite to applying 26 U.S.C. § 1341).
Specifically, the United States maintains: The restitution payment did not arise from the same circumstances, terms, and conditions as Kraft’s original receipt of income. The item originally included in income was Kraft’s salary from the Corporation. There has been no contention that Kraft’s salary was paid in error, and Kraft has never had any obligation to return any portion of it for the years in issue. Nor has he done so. The $160,-000 payment was not a return of “items” included on taxpayers’ return and was not computed with reference to Kraft’s salary, but was a payment to Blue Cross made as part of a plea agreement “in settlement and restitution of any and all civil claims of Blue Cross against Kraft and the Corporation.” Kraft never received any funds directly from Blue Cross. It was the Corporation which did so and included these payments in its income. Thus, it is clear that taxpayers do not qualify for § 1341 treatment. Taxpayers contend that although the Blue Cross funds, in form, were paid to the Corporation, in substance, they were received by Kraft, albeit in the form of salary payments, and that this Court should ignore the form and look at the substance. But it is settled that when a taxpayer has chosen to incorporate to do business, he must accept the tax disadvantages and cannot disregard the corporate entity even where there is only one shareholder.
Section 1341 is inapplicable even if the corporate entity can be disregarded because funds obtained by fraud are not obtained under a claim of right. Section 1341, by its terms, applies only where it “appeared that the taxpayer had an unrestricted right to such item” of income. The courts have repeatedly held that § 1341 has no application where a taxpayer has embezzled or otherwise knowingly misappropriated funds which he is later required to return because it could not have “appeared” that the taxpayer had an unrestricted right to the money so obtained.... The appearance of an unrestricted right to an item depends on objective facts and circumstances, not on a taxpayer’s subjective belief.
It is undisputed that some, if not all, of the $160,000 payment was initially obtained by fraud_ Section 1341 is inapplicable to the extent that Kraft obtained money fraudulently from Blue Cross since it could not have appeared to him that he had an unrestricted right to the money so obtained.
It is settled that for § 1341 to apply, the taxpayer must be entitled under some other provision of the Internal Revenue Code to a deduction for the payment in that year. [T]he courts have uniformly held that losses arising from repayment occasioned by fraudulent activity are not deductible under § 165(c)(1).... [Fraudulently obtaining funds from Blue Cross is no more the proper function of the trade or business of being a podiatrist than is embezzlement the proper function of the trade or business of being a salaried employee or a legitimate securities trader. Thus, the restitution payments are not deductible under § 165(c)(1).
Appellee’s Brief at 15-23 (citations omitted).
In Bailey v. Commissioner, 756 F.2d 44 (6th Cir.1985), this court denied 26 U.S.C. § 1341 tax relief to a taxpayer ordered to pay a $1,036,000 fine (later deemed a restitution to settle a civil action) for violating the terms of a consent decree. Though the Krafts attempt to distinguish Bailey, we see no reason to depart from its holding.
“Before invoking § 1341, the taxpayer must be entitled under some provision of the Internal Revenue Code to a deduction for the restoration payment in that year.” Bailey v. Commissioner, 756 F.2d at 46 (citations omitted). Though the Krafts argue that “all amounts paid by Dr. Kraft in restitution to Blue Cross are deductible,” Appellants’ Reply Brief at 17-18, under 26 U.S.C. § 165(c)(1) (“losses incurred in a trade or business”) because “[t]he repayment was directly related to Kraft’s actions as a podiatrist,” Appellants’ Reply Brief at 18, losses arising from the repayment of fraudulently obtained funds are not deductible under 26 U.S.C. § 165(c)(1). See Mannette v. Commissioner, 69 T.C. 990, 1978 WL 3337 (1978) (the repayment of embezzled funds is not deductible under section 165(c)(1) as a “trade or business” loss). Though the repayment of embezzled funds may be deductible under section 165(c)(2) (“losses incurred in any transaction entered into for profit, though not connected with a trade or business”), the deductibility of nonbusiness losses under section 165(c)(2) is limited to the amount of gross income not derived from the trade or business. Because the Krafts reported no nonbusiness income in 1985, 26 U.S.C. § 165(c)(2) offers them no benefit.
Though the Krafts maintain that they can demonstrate an “entitlement to a deduction of the restitution payment under 26 U.S.C. § 162(a) as an ordinary and necessary expense paid or incurred in carrying on any trade or business,” Appellants’ Reply Brief at 18, their ability to do so hinges on the applicability of 26 U.S.C. § 162(f) (“Fines and penalties”) which provides that “[n]o deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law.” Compare Stephens v. Commissioner, 905 F.2d 667, 671 (2d Cir.1990) (“taxpayers who repay embezzled funds are ordinarily entitled to a deduction in the year in which the funds are repaid” if the restitution is primarily a remedial measure to compensate another party, not “a fine or similar penalty”) with Bailey v. Commissioner, 756 F.2d at 47 (“the characterization of a payment for purposes of § 162(f) turns on the origin of the liability giving rise to it”).
Dr. Kraft agreed “to pay Blue Cross/ Blue Shield of Michigan $160,000 restitution prior to sentencing pursuant to the Victim-Witness Protection Act of 1982.” Rule 11 Plea Agreement at 2. Though the Krafts maintain that this payment does not constitute a penalty, Sixth Circuit precedent establishes that Dr. Kraft’s restitution payment arose out of criminal proceedings thereby constituting a non-deductible penalty. See Bailey v. Commissioner, 756 F.2d at 47 (“Bailey, therefore, forfeited the $1,036,000 as punishment for his violations of the Federal Trade Commission Act, and the payment was thus a fine imposed for purposes of enforcing the law and as punishment for a violation thereof.”).
Moreover, the Krafts are precluded from invoking 26 U.S.C. § 1341 because Dr. Kraft paid $160,000 to Blue Cross as part of his Plea Agreement (relating to mail fraud and drug trafficking charges) which did not result from the same “circumstances, terms and conditions” as his salary from the Corporation.
It is unclear whether Blue Cross remitted its payments directly to the Corporation or to Dr. Kraft individually. Compare Appellants’ Brief at 2 (“Payment for services rendered to Blue Cross was generally made by Blue Cross directly to doctors Haber and Kraft, individually, and they then deposited those monies into the Corporation.”) with Appellee’s Brief at 16 (“Kraft never received any funds directly from Blue Cross. It was the Corporation which did so and included these payments in its income.”) and Indictment at 28-29 (Blue Cross remitted its payments to “Kraft PC Jess DPM”). We need not resolve this conflict, however, because the Blue Cross payments were deposited, at some point in time, in the Corporation’s bank accounts where they were commingled with other funds and used to pay the Corporation’s expenses, including the doctors’ salaries. Dr. Kraft did not report the Blue Cross payments on his individual income tax returns; he reported his salary from the Corporation.
The Sixth Circuit previously summarized this rationale:
Taxpayer is precluded from invoking § 1341 for another reason. [T]he taxpayer’s obligation to repay must arise out of the specific “circumstances, terms and conditions” of the transaction whereby the amount was originally included in his income. The $1,036,000 Bailey paid in 1977 was a civil penalty imposed under 15 U.S.C. § 45 for his multiple violations of an FTC consent order. The payment, therefore, arose from the fact that Bailey violated the consent order, and not from the “circumstances, terms and conditions” of his original receipt of salary and dividend payments from Bestline. Indeed, the amount of the penalty was not computed with reference to the amount of his salary, dividends, and bonuses, and bears no relationship to those amounts.
Bailey v. Commissioner, 756 F.2d at 47 (citations omitted). Indeed, we may fairly infer from this language this court’s unwillingness to abandon the separate identities of a corporation and its owner-employee.
Furthermore, 26 U.S.C. § 1341 does not apply to a taxpayer who has embezzled or otherwise knowingly misappropriated funds which he is later required to return because the taxpayer never had an unrestricted right to the money so obtained. See McKinney v. United States, 574 F.2d 1240, 1243 (5th Cir.1978) (“When the item was embezzled funds, it is clear that it could not appear to the taxpayer that he had any right to the funds, much less an unrestricted right to them. This contention is consistent with the applicable regulations.”) (emphasis in original), cert. denied, 439 U.S. 1072, 99 S.Ct. 843, 59 L.Ed.2d 38 (1979).
Jess and Barbara Kraft failed to set forth a genuine issue of material fact relevant to their 26 U.S.C. § 1341 claim. Accordingly, the district court properly granted the United States’ motion for summary judgment.
III.
We AFFIRM the district court’s summary judgment dismissal of the Krafts’ 26 U.S.C. § 1341 claim for the aforementioned reasons.
Question: What is the number of judges who dissented from the majority?
Answer:
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songer_casetyp1_7-2
|
E
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation".
McMILLAN PARK COMMITTEE, Tony Norman, and Arthur Kinkead v. NATIONAL CAPITAL PLANNING COMMISSION; Sharon Pratt Kelly, Mayor of the District of Columbia; and Ric Murphy, Director of the Department of Administrative Services of the District of Columbia, Appellants.
Nos. 91-5134, 91-5135, 91-5143 and 91-5166.
United States Court of Appeals, District of Columbia Circuit.
Argued Feb. 21, 1992.
Decided July 7, 1992.
Jacques B. Gelin, Atty., Dept, of Justice, with whom Barry M. Hartman, Acting Asst. Atty. Gen., Jay B. Stephens, U.S. Atty., John C. Cleary, Asst. U.S. Atty., and Martin W. Matzen, Atty., Dept, of Justice, Washington, D.C., were on the brief, for federal appellants.
Lutz Alexander Prager, Asst. Deputy Corp. Counsel, Office of the Corp. Counsel, with whom John Payton, Corp. Counsel, and Charles L. Reischel, Deputy Corp. Counsel, Washington, D.C., were on the brief, for appellants Sharon Pratt Kelly, et al.
Katherine A. Meyer, Washington, D.C., for appellees McMillan Park Committee, Tony Norman and Arthur Kinkead in Nos. 91-5134 and 91-5166.
Andrea C. Ferster, with whom David A. Doheny and Elizabeth S. Merritt, Washington, D.C., for National Trust for Historic Preservation in the U.S., and Lovida H. Coleman, Jr., for the D.C. Preservation League, were on the joint brief, for appel-lees in Nos. 91-5135 and 91-5143.
Before EDWARDS, SENTELLE, and RANDOLPH, Circuit Judges.
Opinion for the Court filed by Circuit Judge SENTELLE.
Concurring opinion filed by Circuit Judge RANDOLPH.
SENTELLE, Circuit Judge:
The National Capital Planning Commission (“Planning Commission”) and the District of Columbia government (“D.C.” or “the District”) appeal from a District Court order involving the National Historic Preservation Act (“NHPA”), 16 U.S.C. §§ 470 to 470w-6. Finding that the Planning Commission violated the NHPA when it reviewed an amendment to the Comprehensive Plan for the National Capital that would allow commercial development of McMillan Park, the District Court issued an injunction prohibiting implementation of the amendment. Because we conclude on the facts of this case that the Planning Commission did not engage in an “undertaking,” as that term is defined in regulations implementing the NHPA, we hold that the Planning Commission did not violate the NHPA and we therefore reverse.
BACKGROUND
I. Statutory Backdrop
A. The National Historic Preservation Act
As explained in Lee v. Thornburgh, 877 F.2d 1053, 1056 (D.C.Cir.1989), the NHPA is “aimed solely at discouraging federal agencies from ignoring preservation values in projects they initiate, approve funds for or otherwise control.” Section 106 of the NHPA, 16 U.S.C. § 470f, accomplishes this by requiring federal agencies to consult with the Advisory Council on Historic Preservation (“Advisory Council”) prior to taking an action that may affect a site “included in or eligible for inclusion in the National Register.” In full, § 106 provides:
The head of any Federal agency having direct or indirect jurisdiction over a proposed Federal or federally assisted undertaking in any State and the head of any Federal department or independent agency having authority to license any undertaking shall, prior to the approval of the expenditure of any Federal funds on the undertaking or prior to the issuance of any license, as the case may be, take into account the effect of the undertaking on any district, site, building, structure, or object that is included in or eligible for inclusion in the National Register. The head of any such Federal agency shall afford the Advisory Council on Historic Preservation established under section 470i to 47Ov of this title a reasonable opportunity to comment with regard to such undertaking.
16 U.S.C. § 470f (emphasis added).
Agencies thus incur an obligation to comply with the NHPA when they engage in an “undertaking.” See id.; Lee, 877 F.2d at 1056 (“[The] NHPA imposes obligations only when a project is undertaken either by a federal agency or through the auspices of agency funding or approval.”). The NHPA itself provides scant guidance for determining whether an undertaking has occurred, but the Advisory Council, in its implementing regulations, 36 C.F.R. Part 800, furnishes a detailed definition:
Undertaking means any project, activity, or program that can result in changes in the character or use of historic properties, if any such historic properties are located in the area of potential effects. The project, activity, or program must be under the direct or indirect jurisdiction of a Federal agency or licensed or assisted by a Federal agency. Undertakings include new and continuing projects, activities, or programs and any of their elements not previously considered under section 106.
36 C.F.R. § 800.2(o).
Once triggered, an agency must satisfy a number of consultation and review procedures, known as the § 106 process, which require it to work with state historic preservation officers and the Advisory Council in tailoring proposed undertakings so that, to the extent possible, they do not harm historic properties. See 36 C.F.R. §§ 800.3 to 800.5 (describing regulatory steps involved in the § 106 process).
B. The National Capital Planning Act
The National Capital Planning Act (“Planning Act”), 40 U.S.C. §§ 71-74, empowers the National Capital Planning Commission (“Planning Commission”) “to preserve the important historical and natural features” of the federal city. 40 U.S.C. § 71a(a)(1). Much of the Planning Commission’s duties center on the comprehensive plan for the National Capital, which it prepares and updates in conjunction with the D.C. government. 40 U.S.C. § 71c. First promulgated by the Planning Commission and the D.C. government in 1983, the comprehensive plan consists of federal and local elements, serves as a blueprint for future city development, and identifies federal interests that developers must accommodate. Planning Commission Comprehensive Plan for the National Capital, Parks, Open Space and Natural Features 2 (hereinafter “Comprehensive Plan”), reprinted in Joint Appendix (“J.A.”) 105-117.
The D.C. government, through action by the Mayor and City Council, may adopt proposed amendments to the comprehensive plan and then submit them to the Planning Commission “for review and comment with regard to the impact of such ... amendment on the interests or functions of the Federal Establishment in the National Capital.” 40 U.S.C. § 71a(a)(3). Upon receipt of an amendment, the Planning Commission “shall, within sixty days ..., certify to the [City] Council whether such ... amendment has a negative impact on the interests or functions of the Federal Establishment in the National Capital.” Id. § 71a(a)(4)(A). Should the Planning Commission fail to act within the sixty-day time limit, such “amendment shall be deemed to have no such negative impact and ... shall be incorporated into the comprehensive plan [for the National Capital] and it shall be implemented.” 40 U.S.C. § 71a(a)(4)(C). Finally, if the Planning Commission makes a finding of negative impact, the D.C. government may suggest modifications to the amendment; however, the Planning Commission retains the power to veto any amendment to the comprehensive plan that it finds will result in a negative impact. Id. § 71a(a)(4)(B)-(C).
II. Factual Background
McMillan Park lies in the northern part of the District of Columbia adjacent to North Capitol Street. Until the mid-1980’s, the Army Corps of Engineers owned the site, which accommodated a massive slow sand drinking water filtration system dating from the early days of this century. In 1991, the D.C. Historic Preservation Review Board designated McMillan Park a Historic Landmark and nominated the site for the National Register of Historic Places.
During the Corps of Engineers’s ownership, no commercial development of the Park occurred, and public access to the Park had been restricted since World War II when the Army erected a fence to guard against sabotage of the city’s water supply. When the Planning Commission prepared the federal element of the first Comprehensive Plan in 1983, it included McMillan Park as among the “Parks, Open Space and Natural Features” of the city that “should be conserved and whose essential Open Space Character [be] maintained.” Comprehensive Plan 33, reprinted in J.A. 116. The Park’s future became uncertain, though, in 1986 when the Corps of Engineers declared the property surplus and asked the General Services Administration (“GSA”) to dispose of it.
As the GSA searched for prospective buyers, the Planning Commission urged “the continuation of the open space ambiance that currently exists and the continuation of the treatment of this site as a Special Place.” Planning Commission Report to the General Services Administration, NCPC File No. 0841, at 3 (May 1, 1986), reprinted in J.A. 121, 123. While not disagreeing with this goal, the GSA iterated its position that open space was not the highest and best use of the property, and insisted on selling the property for mixed commercial development. The D.C. government first expressed interest in the Park in June of 1986, and agreed to purchase the Park for mixed commercial/public use. Letter from William B. Johnson, Director, D.C. Dep’t of Administrative Services, to B.C. Maltby, GSA (Sept. 23, 1986) (“Johnson Letter”), reprinted in J.A. 129.
At this point, the Advisory Council expressed “serious concerns” about the transfer and chastised GSA for not engaging in the NHPA § 106 process to determine if the site contained any historic or cultural resources. To satisfy these concerns, GSA agreed to include in the Deed of Sale to the District eight restrictive covenants suggested by the Advisory Council. The covenants did not prevent the District from using the Park for commercial development, but required it to submit all development plans to the D.C. Historic Preservation Officer for approval. If approval could not be obtained, then the District must “immediately request the comments of the [Advisory] Council in accordance with 36 C.F.R. 800.” Brief for Federal Appellants at 12; see also Offer to Purchase Real Estate and Acceptance ¶ 3.11, reprinted in J.A. 142, 145.
The Advisory Council thereupon issued a letter to GSA stating that, based on inclusion of the restrictive covenants, “the requirements of Section 106 of the National Historic Preservation Act and the Council’s regulations have been met for this project.” Letter from Don L. Klima, Advisory Council, to Patricia Bailey, GSA (March 25, 1987), reprinted in J.A. 141. With the covenants in place and the Advisory Council satisfied that the GSA. had complied with the NHPA, the District purchased McMillan Park for $9.3 million.
The District still could not develop the Park, however, unless the Comprehensive Plan was amended to permit commercial development. On December 21, 1989, the City Council enacted an amendment, among about 125 others, to the Plan that would place the Park in “the mixed use medium density residential, moderate density commercial, and parks, recreation, and open space land use category.” D.C. Act 8-138, amendment 110 (Dec. 21, 1989), reprinted in J.A. 230, 231. The Park amendment, along with the others, then went to the Planning Commission for its review as mandated by § 71a of the Planning Act.
At a meeting of the Planning Commission on February 22, 1990, to consider the amendments package, a representative of the Preservation Trust argued that the Planning Commission should not “approve” the amendment regarding McMillan Park until consulting with the Advisory Council under the § 106 process. The Planning Commission did not initiate the § 106 process, however, and moved forward with their review of the amendments. They did include within non-binding recommendations their “concern” about the Park and their objection “to the disposition of the site for private or semi-public development that would not maintain [the Park’s] character as undeveloped open space.” Planning Commission Executive Director’s Recommendation, NCPC File Nos. CP19 & CP01/2028, at 9-10, reprinted in J.A. 247, 255-56. But the Planning Commission ultimately found that the Park amendment would not create a negative impact, and they so advised the D.C. Council.
In a letter dated March 22, 1990, the Advisory Council advised the Planning Commission that, “[fjrom our understanding of the case,” the § 106 process applied to the Commission’s “approval” of Comprehensive Plan amendments regarding McMillan Park. J.A. 339. The Planning Commission responded by asserting that it was not engaging in an “undertaking” because it simply reviews, not “approve[s],” Comprehensive Plan amendments. Letter from Reginald Griffith, Planning Commission, to John Fowler, Advisory Council 1 (Apr. 3, 1990), reprinted in J.A. 341. The letter also suggested that the restrictive covenants in the deed to McMillan Park “specifically anticipated land use changes,” thereby making an additional § 106 review “superfluous.” Id. at 341-42.
The next day, April 4, 1990, the Planning Commission transmitted to the D.C. Council its final certification that the Park amendment did not have a negative effect on the federal interest. As required by D.C.Code § 1-233(c), the City Council transmitted the amendments to Congress for its thirty-day review. After the review period expired without congressional objection, the amendments became effective in May 1990.
The McMillan Park Committee and the National Trust for Historic Preservation challenged the Park amendment in District Court, arguing that the Planning Commission’s 40 U.S.C. § 71a review constituted an undertaking and triggered the § 106 process. Agreeing with the challengers, the District Court found that the Planning Commission did not observe procedures required by law, declared the Park amendment invalid, and enjoined all “actions taken in reliance upon it.” McMillan Park Comm. v. National Capital Plan. Comm’n, 759 F.Supp. 908, 917 (D.D.C.1991). This appeal followed.
Analysis
Without expressing any views on the District Court’s analysis, we need not reach today the issue of whether Planning Commission review of proposed amendments to the Comprehensive Plan under 40 U.S.C. § 71a triggers the § 106 process. Instead, we are convinced that the possible adverse effects created by the Park amendment were considered to the satisfaction of the NHPA when the District purchased McMillan Park from the federal government. Since implementation of the Park amendment entails no new, unconsidered elements, the Planning Commission’s review of the amendment could not constitute an “undertaking,” and no NHPA obligations attach.
In determining if the Planning Commission’s action comprised an “undertaking,” we look to the Advisory Council’s regulations implementing the NHPA, promulgated under authority granted by Congress, 16 U.S.C. § 470s. Though perhaps not an administrative agency in the sense contemplated by Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984) (remarking on the “considerable weight [that] should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer”), we nevertheless believe the Advisory Council regulations command substantial judicial deference. In an analogous situation, the Supreme Court in Andrus v. Sierra Club, 442 U.S. 347, 99 S.Ct. 2335, 60 L.Ed.2d 943 (1979), explained that regulations issued by the Council on Environmental Quality interpreting the National Environmental Policy Act (“NEPA”) were entitled to “substantial deference” because the “Council was created by NEPA, and charged in that statute with the responsibility ‘to review and appraise the various programs and activities of the Federal Government in the light of the policy set forth in ... this Act ..., and to make recommendations to the President with respect thereto.’ ” Id. at 358, 99 S.Ct. at 2341 (citations omitted). Similarly, the Advisory Council was created by the NHPA, 16 U.S.C. § 470i, and charged in that Act with the responsibility to “advise the President and the Congress on matters relating to historic preservation,” and to “review the policies and programs of Federal agencies and recommend to such agencies methods to improve the effectiveness, coordination, and consistency of those' policies and programs with the policies and programs carried out under this subchap-ter.” Id. § 470j(a)(1) & (6). Given the Supreme Court’s reasoning in Andrus, we see no basis 'for extending the Advisory Council’s NHPA regulations any less deference than is traditionally afforded the NEPA regulations of the Council on Environmental Quality.
As defined by the Advisory Council regulations, an “undertaking” includes “new and continuing projects, activities, or programs and any of their elements not previously considered under section 106.” 36 C.F.R. § 800.2(o) (emphasis added). The necessary implication. of this definition is that a project in which all the elements have been “previously considered under section 106” does not comprise an “undertaking.” We find this definition entirely reasonable, and observe that it comports with a logical application of the NHPA; for if a project has previously satisfied the § 106 process, then nothing would be gained by further review if there are no new, unconsidered elements presented by the project.
Applying this understanding of “undertaking,” we find that the Advisory Council previously considered all the elements presented by the Park amendment at the time the District purchased the Park from the GSA. When the GSA made the property available, it specified that the range of possible uses included commercial and residential development, GSA Notice of availability of excess. real property, DC-P-12 (March 14, 1986), reprinted in J.A. 118-19, and it rejected a suggestion that the Park be used solely for recreation and open space. Letter from B.C. Maltby, GSA to Reginald Griffith, Planning Commission (May 21, 1986), reprinted in J.A. 126. Likewise, the D.C. government made clear its intention to use the site for recreational space, low and moderate income housing, and commercial development. Johnson Letter, reprinted in J.A. 129.
Shortly after the Johnson Letter, the Advisory Council reminded the GSA about its responsibilities under the NHPA regarding the proposed sale of the Park-. Letter from Don Klima, Advisory Council, to B.C. Malt-by, GSA (Sept. 29, 1986), reprinted in J.A. 131. As detailed above, the GSA submitted that if it emplaced in the District’s deed the eight restrictive covenants recommended by the Advisory Council, then the sale would have no adverse effects on the historic resources at the Park and would therefore comply with the NHPA. .Letter from Patricia Bailey, GSA, to Don Klima, Advisory Council (Feb. 27, 1987), reprinted in J.A. 139 (citing 36 C.F.R. § 800.9(c)(3), which provides that an undertaking involving the sale of property may be found to have no “adverse effect” if “adequate restrictions or conditions are included to ensure preservation of the property’s significant historic features.”).
These covenants, the effectiveness of which no party contests, nearly duplicate the § 106 process by providing extensive consultation rights for the D.C. historic preservation officer before any development may take place at the Park and by requiring the Advisory Council to mediate disputes concerning effects on historic resources. Responding to the GSA’s submission, the Advisory Council concurred that, by including the restrictive covenants, the “requirements ..of Section 106 of the [NHPA] and the Council’s regulations have been met for this project.” Letter from Don Klima, Advisory Council, to Patricia Bailey, GSA (March 25, 1987), reprinted in J.A. 141.
From this sequence of events and the protections obtained in the restrictive covenants, we believe the Advisory Council had a full opportunity to review the proposed use of the Park for commercial development, and satisfied itself that a change in the Park’s use-designation could be achieved consistent with the strictures of the NHPA through inclusion of the protective covenants. ■ We therefore fail to see why the Park amendment, which does no more than codify the change in the Park’s use-designation in the manner contemplated by the Advisory Council at the time of the sale, demands additional § 106 review. The Park amendment does not specify how the land will be developed or what structures may be placed there, nor does it limit in any way the operation of the restrictive covenants contained in the District’s deed to the Park. Moreover, this is not a case where the GSA sold the property with covenants predicated on a recreational use of the Park and the Planning Commission was then presented with an amendment allowing commercial development. Instead, the Park amendment adds no new element previously unconsidered under the § 106 process, and we therefore find that it did not constitute an “undertaking” and could not obligate the Planning Commission to comply with the § 106 process.
We do not say that an agency’s compliance with the § 106 process for a project necessarily satisfies all future obligations that it or other federal agencies may have to comply with the NHPA regarding the same project. As discussed in Vieux Carre Property Owners v. Brown, 948 F.2d 1436, 1444-45 (5th Cir.1991), there is a line of cases suggesting that whenever a federal agency has approval authority over a continuing project and has the power to modify the project to mitigate any adverse impacts on historic resources, then the § 106 process may apply. Id. at 1445 n. 27 (citing cases so holding). However, we find these cases inapposite, since they all involved on-going projects, funded or approved by a single federal agency, that had never been subjected to the § 106 process or received Advisory Council approval. See Vieux Carre, 948 F.2d at 1439-40 (relating that the United States Army Corps of Engineers did not employ the § 106 process when approving an applicant’s project under a nationwide permit); Morris County Trust for Historic Preservation v. Pierce, 714 F.2d 271, 279 (3d Cir.1983) (“It is undisputed that [the federal agency] did not at any time take into account the effect of the [project] on [a historic resource], or afford the Advisory Council ... a reasonable opportunity to comment on the project.”); and Waterbury Action to Conserve Our Heritage, Inc. v. Harris, 603 F.2d 310, 315 (2d Cir.) (noting that Advisory Council and State Historic Preservation Officer had not been consulted concerning a federally-funded project),. cert. denied, 444 U.S. 995, 100 S.Ct. 530, 62 L.Ed.2d 426 (1979). Where, as here, a project has been found by the Advisory Council to comply fully with the § 106 process, we will heed 36 C.F.R. § 800.2(o) and find that no undertaking occurs when that same project, with no new, unreviewed elements, comes before a second federal agency.
Finally, we wish to dispel any thought that we are disposing of this case under 36 C.F.R. § 800.5(b), which allows agencies to satisfy the § 106 process if they can show that their project will have no adverse effect on historic resources. As the District Court properly found, findings of no adverse effect must be documented and submitted to a state historic preservation officer for review. See McMillan Park, 759 F.Supp. at 914. The Planning Commission never prepared a finding of no adverse effect, and could therefore not avail itself of this process. However, an agency need not satisfy the § 106 process at all, let alone § 800.5(b), unless it is engaged in an undertaking. Lee, 877 F.2d at 1056. And we find that the Planning Commission’s review of the Park amendment did not, under the circumstances before us today, constitute an undertaking.
CONCLUSION
For the reasons discussed above, we find that the Planning Commission’s consideration of the Park amendment under 40 U.S.C. § 71a did not constitute an “undertaking” under the NHPA given the prior review of this project by the Advisory Council. Accordingly, the decision of the District Court below is
Reversed.
. The definition section of the NHPA, 16 U.S.C. § 470w, reads:
“‘Undertaking’ means any action as described in section 470f of this title." 16 U.S.C. § 470w(7).
Question: What is the specific issue in the case within the general category of "economic activity and regulation"?
A. taxes, patents, copyright
B. torts
C. commercial disputes
D. bankruptcy, antitrust, securities
E. misc economic regulation and benefits
F. property disputes
G. other
Answer:
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songer_direct1
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A
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What follows is an opinion from a United States Court of Appeals.
Your task is to determine the ideological directionality of the court of appeals decision, coded as "liberal" or "conservative". Consider liberal to be for the defendant. Consider the directionality to be "mixed" if the directionality of the decision was intermediate to the extremes defined above or if the decision was mixed (e.g., the conviction of defendant in a criminal trial was affirmed on one count but reversed on a second count or if the conviction was afirmed but the sentence was reduced). Consider "not ascertained" if the directionality could not be determined or if the outcome could not be classified according to any conventional outcome standards.
Roland ANDERSON, # 115181, Appellee, v. WARDEN, MARYLAND PENITENTIARY, Appellant. Roland ANDERSON, # 115181, Appellant, v. WARDEN, MARYLAND PENITENTIARY, Appellee.
Nos. 81-6626, 81-6627.
United States Court of Appeals, Fourth Circuit.
Argued Nov. 5, 1981.
Decided Feb. 9, 1982.
Bruce C. Bereano, Annapolis, Md., for appellee/cross-appellant.
Patricia E. McDonald, Asst. Atty. Gen., Baltimore, Md. (Stephen H. Sachs, Atty. Gen. of Md., Baltimore, Md., on brief), for appellant/cross-appellee.
Before FIELD, Senior Circuit Judge, and HALL and SPROUSE, Circuit Judges.
K. K. HALL, Circuit Judge:
The State of Maryland appeals from the grant of a writ of habeas corpus issued by the district court setting aside the state court conviction of Roland Anderson because of misconduct on the part of the trial judge. We find that the trial judge committed error and we do not condone what he did. However, the overwhelming evidence supports the conviction, and therefore we find the error harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967). Accordingly, we reverse.
Eleanor Davis was a sixty-two year old widow, living alone in Annapolis, Maryland. On the night of April 26, 1970, sometime between the hours of 10:00 p. m. and 2:00 a. m., she was raped and murdered in her bed. Her bloody and battered body was found the next morning by her adult son.
The day after the murder, the police brought Roland Anderson in for questioning. They did not arrest him then, but he agreed to be fingerprinted and he gave the police hair and saliva samples. He and his parents also consented to allow the police to search their home. During the search of the defendant’s bedroom, the officers found a pair of trousers with blood stains and seminal stains on them. When questioned, Anderson admitted having worn those pants on the night of the murder. Also, there were fingerprints and palmprints found inside Mrs. Davis’ bathroom window ledge and on her bathtub, which turned out to be the defendant’s. By May 8, the police had amassed enough evidence to consider Anderson a prime suspect, and they placed him under arrest.
Anderson signed a written confession after giving a detailed oral account of the crime. He related the following sequence of events: Having entered Mrs. Davis’ apartment through the bathroom window, he worked his way through the apartment looking for money. Mrs. Davis woke up while he was in her bedroom and recognized him. He knocked her unconscious with his fist. Then a “funny feeling” came over him and he raped her. When he remembered that she would be able to identify him, he decided to kill her. He searched around and found a hammer and a butcher knife. Returning to the bedroom, he beat her over the head with the hammer, and then, because she was still moaning, he slashed her left wrist with the knife. He left, taking the knife and the hammer, which he put into a brown paper bag and stuffed into the garbage can behind his house.
Item by item, the evidence corroborated the confession as follows:
1. Confession : He entered the apartment through the bathroom window.
Evidence : His fingerprints and palm-prints were found inside the bathroom window ledge and on the bathtub.
2. Confession : He searched through the apartment for money.
Evidence : Mrs. Davis was an impeccable housekeeper, yet her bureau drawers were found partially open, as if someone had been rummaging through them.
3. Confession: Mrs. Davis woke up and recognized him.
Evidence: They lived in the same neighborhood.
4. Confession: He knocked her unconscious.
Evidence : The state’s pathologist who testified at trial concluded that Mrs. Davis was raped while she was unconscious.
5. Confession : He raped Mrs. Davis.
Evidence : The autopsy report noted the presence of semen in Mrs. Davis’ vagina. Pubic hairs which were microscopically similar to Mrs. Davis’ were found on the trousers Anderson admitted having worn on the night of the crime. Seminal secretions found on the bedsheets and on Anderson’s clothing evidenced the présence of both of their blood groups. The last is a particularly telling point because Mrs. Davis had an uncommon blood type.
6. Confession : He hit Mrs. Davis over the head with the hammer.
Evidence: The pathologist testified that the murderer had smashed Mrs. Davis’'head with a blunt instrument causing gaping scalp wounds, numerous skull fractures, and bruising of the brain.
7. Confession: He slashed her left wrist to kill her.
Evidence: Although the pathologist testified that the head injuries alone would have been fatal, the direct cause of Mrs. Davis’ death was a deep cut on her left wrist.
8. Confession: He found a hammer and a knife, and took them with him when he left.
Evidence: Mrs. Davis’ son testified that a hammer was missing from his mother’s belongings.
In sum, the factual evidence matched the confession so exactly as to remove all reasonable possibility of coincidence.
Nevertheless, the defendant asserted that he was nowhere near the scene of the crime, but that he had been at Phyllis Cook’s house on the night of the murder. Ms. Cook and Clinton Roberts both confirmed his story. Roberts testified that he and Anderson had left for Cook’s house some time after 9:30 p.m. Although Cook did not know what time they had arrived, she said she knew Anderson had been at her house until 3:00 or 3:30 a. m.
After both sides had rested, the state’s attorney told the judge that he thought the alibi witnesses had lied. The judge called Cook and Roberts into his chambers and admonished them about the consequences of perjury, whereupon they both agreed to change their stories. The judge then reconvened court and told the jury that the two alibi witnesses had lied in their earlier testimony and wanted to revise their statements. As the witnesses took the stand again, the judge cautioned them that they were being given one last chance to tell the truth. Roberts then admitted that he could have been mistaken about the time he left Anderson’s neighborhood that evening, and conceded that it could have been as late as 10:30 or 11:00 p. m. Cook, in turn, acknowledged that she could not be sure if Anderson had been at her house for the entire time between 1:00 a. m. and 3:00 a. m.
The jury found Anderson guilty. We find no reason to question the validity of that verdict.
Anderson tried to establish an alibi with two witnesses who from the start were not positive about the exact amount of time they had spent with him. All the later testimony did was to emphasize how vague their memories actually were. Furthermore, even if Cook and Roberts had never changed their stories, Anderson’s alibi defense would have been unavailing. As we outlined above, the evidence corroborated his confession in every detail. Only the murderer could have given as exact an account of the crime as Anderson did.
In the past, courts have gone to extraordinary lengths in the name of liberty to free guilty people on technicalities. Under the facts of this case, we refuse to adopt that practice. Roland Anderson was found guilty by a jury of his peers. That conviction is supported by a large body of evidence and cannot be impugned by the trial judge’s error.
We have considered the other issues Anderson has raised and we find them to be without merit. Accordingly, we reverse the decision of the district court and hold that the petition for a writ of habeas corpus is denied.
REVERSED.
. Anderson was fifteen years old at the time of the crime. Before questioning him, a police officer read him his Miranda rights and explained them to him in the presence of his parents. During the explanation, the officer stopped frequently and another officer asked them if they understood what was being said. Once the defendant had been fully advised of his rights, he and his parents signed a waiver of rights form.
After a couple of hours of questioning, he confessed to the crime. The officer then prepared a written confession and Anderson signed it.
At trial, Anderson tried to disavow the written confession, claiming that he had only a seventh grade education and could not read what he was signing. His argument has no merit. The questioning agent testified about the oral statement in which the defendant had related the details of the murder. The signed confession was merely that statement reduced to writing. Anderson was able to tell about the enme even if he could not read many of his words once they were written down.
. Anderson said that he had gone into Mrs. Davis’ apartment through the bathroom window about three months earlier to help her get in when she had locked her keys inside. He said that at that time Mrs. Davis had told him that she was so forgetful about her keys that she had to keep her bathroom window unlocked.
. These items were never recovered.
. In disputing his confession, Anderson asserted that his fingerprints were in Mrs. Davis’ bathroom because he had gone in through the bathroom window to help her get into her apartment when she had locked herself out about three months earlier. This explanation is patently incredible. No juror could believe that the defendant’s fingerprints would have remained on Mrs. Davis’ bathtub for three months.
. Mrs. Davis belonged to blood group B; Anderson belongs to blood group A. According to expert testimony adduced at trial, evidence of a person’s blood type can be found in body secretions such as saliva, semen, and vaginal fluids. Thus, the presence of both types in the secretions is easily explained: Anderson’s semen could have contributed the type A factor; Mrs. Davis’ vaginal discharge could have contributed the type B factor.
. An expert at trial testified that only 10% of the population belongs to blood group B.
. The judge said,
Mr. Foreman, ladies and gentlemen of the jury at the conclusion of this case two of the witnesses who testified have indicated to the Court that they told an untruth in their testimony and desire an opportunity to correct that before you ladies and gentlemen before this case concludes. As a matter of law, the Court must afford a witness an opportunity to purge himself or herself of perjury. For that purpose we are recalling these two witnesses to the stand to give them an opportunity to revise their stories to what they are now saying is the correct testimony.
. To Ms. Cook, in the presence of the jury, the judge said,
You have indicated to the Court that a portion of the testimony that you previously gave under oath in this case was false. The Court now affords you an opportunity to correct that testimony by telling the" truth and to purge yourself of the perjury you have committed. This is the last chance you will be given in this trial to tell the truth.
Before Roberts took the stand again, the judge spoke with him, in front of the jury, as follows:
Judge Bowen: At the conclusion of the testimony in this case you indicated to the Court that some portions of the testimony you had given before this jury were false. You asked the Court for an opportunity to purge yourself of this crime by being afforded an opportunity to tell the truth to the jury. This is your opportunity to tell the truth. It is the last one you are going to get in this trial. A. Yes sir.
Judge Bowen: You better make good use of it.
. Compare e.g., United States v. Bates, 468 F.2d 1252 (5th Cir. 1972). In Bates, a key witness for the prosecution completely changed his testimony after he had been accused of perjury. Unlike that case, the altered testimony here could better be characterized as a clarification.
. Anderson claims ineffective assistance of counsel. The only arguable instance of ineffective assistance is counsel’s failure to object when the judge commented to the jury about the alibi witnesses’ testimony. However, since we hold those acts to have been harmless error, counsel’s failure to object can not be faulted.
Question: What is the ideological directionality of the court of appeals decision?
A. conservative
B. liberal
C. mixed
D. not ascertained
Answer:
|
songer_counsel2
|
D
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
Your task is to determine the nature of the counsel for the respondent. If name of attorney was given with no other indication of affiliation, assume it is private - unless a government agency was the party
BAKER DRIVEAWAY CO., Inc., v. CLARK.
No. 5590.
Circuit Court of Appeals, Fourth Circuit
May 13, 1947.
Paul S. Hudgins and Albert S. Kemper, Jr., both of Bluefield, W.Va. (Richardson & Kemper, of Bluefield, W. Va., on the brief) for appellant.
Joseph M. Sanders, of Bluefield, W. Va. (A. J. Lubliner, of Bluefield, Va., on the brief), for appellee.
Before PARKER, Circuit Judge, GRONER, Chief Justice, United States Court of Appeals for the District of Columbia, and SOPER, Circuit Judge.
Sitting in the Fourth Circuit by special assignment.
SOPER, Circuit Judge.
The plaintiff in the District Court, a boy of nine years, was struck by an automobile tractor and severely injured as the machine was allowed to run down a steep hill after dark without lights on March 21, 1946, in Bluefield, West Virginia. The tractor was the property of Baker Driveaway Company, Inc., and was used in the business of the company to haul automobile-carrying trailers from Detroit to various points in the South. It was being driven at the time of the accident by Robert J. Williams, an employee of the company. Jurisdiction was based on diverse citizenship. The case was submitted upon interrogatories in response to which the jury found that at the time of the accident Williams was acting within the scope of his employment, that the accident was caused by his negligent operation of the tractor and that the plaintiff did not contribute thereto by negligence on his part. A verdict for $5,000 in the plaintiff’s favor was rendered.
We are concerned with the single question whether there was sufficient evidence to justify the submission of the issue whether Williams was acting within the scope of his employment at the time or was, on the contrary, engaged upon a mission of his own. The evidence bearing on this issue was substantially as follows. Williams had been employed by the Company for eight years to train new drivers, and to drive trailer busses to and from Detroit. He had been a friend of Mrs. Clark, the boy’s mother, for several years and sometimes stopped at her house when he visited her at'Bluefield. On Tuesday, March 19, 1946, he was in Roanoke, and wishing to visit Mrs. dark, he telephoned to the manager of the Roanoke division of the corporation, who .was then in Richmond, and asked permission to spend two or three days in Bluefield. The manager knew that Williams and Mrs. Clark were going together. Williams testified that in response to this request the manager told him that the company had a tractor that had to go to Detroit the end. of the week, and that Williams should take the tractor to Bluefield, stay two or three days, and then go on to Detroit and be back in Roanoke on Monday or Tuesday. Bluefield is not on the direct route from Roanoke to Detroit. In order to reach Bluefield it is necessary to leave that route at Princeton, West Virginia, which is nine miles from Bluefield.
' Accordingly, Williams drove the truck to Bluefield and spent two days, during which he received his regular pay. He drove to the Clark house and then took Mrs. Clark in the tractor to buy some household supplies. He spent the night at the house and parked the truck on a city street two blocks away. The next day he used the tractor again to take Mrs. Clark to the store and bring her back home. It was then 5 P. M., and after lingering a little while, he got his laundry which Mrs. Clark had washed for him and got into the tractor to resume his journey to Detroit. He started the motor and drove downhill to a wide place in the road to turn around so as to face in the right direction, and as he was turning, the battery, which was out of order, went dead. He borrowed a battery, drove the tractor again to the Clark house, removed the battery and reinstalled the dead one.. He then released his brake and allowed the car to drift downhill in gear in order to. start the engine. By that time night had fallen, and as the car drifted down the-hill without lights, it struck the child and, injured him. Williams had started to return to Princeton when the accident occurred.
The appellant defends on the broad ground that the side trip from Princeton to Bluefield, although undertaken with the consent of the employer, was merely a personal mission of Williams in deviation. from the course of his employment; and hence the contention is made that the case is governed by the rule that the owner of an automobile is not liable for injuries caused by a servant while operating the car for his own business or pleasure although he has the owner’s consent; and that if the primary purpose of the use of the car is the personal convenience or business of the servant, incidental benefit derived by the employer therefrom will not impose liability upon him for his servant’s negligence. Meyn v. Dulaney-Miller Auto Co., 118 W. Va. 545, 553, 191 S.E. 558; Jenkins v. Spitler, 120 W. Va. 514, 517, 199 S.E. 368; Hollen v. Reynolds, 123 W. Va. 360, 15 S.E.2d 163; Lacewell v. Lampkin, 123 W. Va. 138, 13 S.E.2d 583.
This position, however, does not give sufficient heed to the case portrayed by the plaintiff’s evidence which tends to show that the primary purpose of Williams’ journey was the transportation of the tractor from Roanoke to Detroit, a distance of approximately six hundred, miles, to which the side trip of nine miles and return between Princeton and Bluefield and the visit at Bluefield for a day or two was merely incidental. In any event, a reasonable inference to that effect may be drawn from the facts, and it was proper for the judge to permit the jury to pass upon the question. In Meyn v. Dulaney-Miller Auto Co., 118 W. Va. 545, 191 S.E. 558, where an employee had used his employer’s car with permission for his own enjoyment and had then returned to the employer’s place of business for a purpose connected with the business and later met with an accident as he drove the car home in accordance with his usual custom, the court held (118 W. Va. p. 555, 191 S.E. 558) that under the circumstances it was the clear province of the jury to determine whether or not at the time of the accident the employee was acting within the scope of his employment. The court also said (118 W.Va. pp. 554, 555, 191 S.E. 563):
“ * * * Generally, where a servant has permission to use a car in order to better execute his business to go to and from his meals and home, he is acting within the scope of his employment. 5 Am. Juris., 718, § 379; 45 A.L.R. 490; 68 A.L.R. 1058; 80 A.L.R. 732; Goff v. Clarksburg Dairy Co., 86 W.Va. 237, 103 S.E. 58; Fisick v. Larber, 95 Misc. 574, 159 N.Y. S. 722; Depue v. [George D.] Salmon Co., 92 N.J.L. 550, 106 A. 379; Brennan v. [J. B.] White Motor Co. [et al.], 210 App.Div. 533, 206 N.Y.S. 544; Kish v. California State Automobile Ass’n, 190 Cal. 246, 212 P. 27. Whether the driver of an automobile using his employer’s car to go to and from work is acting within the scope of his employment, is a question of fact for the jury. Goff v. Clarksburg Dairy Co., supra; Zondler v. Foster Mfg. & Supply Co., 277 Pa. 98, 120 A. 705; Puccia v. Sevigne, 258 Mass. 234, 154 N.E. 765; Moore v. Roddie, 103 Wash. 386, 174 P. 648, modified 106 Wash. 548, 180 P. 879; Wrightsman v. Glidewell, 210 Mo.App. 367, 239 S.W. 574; Ferris v. McArdle, 92 N.J.L. 580, 106 A. 460; Brennan v. White Motor Co. et al., supra; Butler v. Hyperion Theatre Co., 100 Conn. 551, 124 A. 220; Dunbaden v. Castle Ice Cream Co., 103 N.J.L. 427, 135 A. 886. Likewise, it is generally a jury question where an employee driving his employer’s automobile diverts from his master’s business and is involved in an accident upon returning towards the master’s business. Reynolds v. Denholm, 213 Mass. 576, 100 N.E. 1006; Rooks v. Swift & Co., 210 Ala. 364, 98 So. 16; Good v. Berrie, 123 Me. 266, 122 A. 630; Bloodgood v. Whitney, 235 N.Y. 110, 139 N.E. 209; Gibson v. Dupree, 26 Colo.App. 324, 144 P. 1133; Riley v. Standard Oil Co., [of New York], 231 N.Y. 301, 132 N.E. 97, 22 A.L.R. 1382; Cummings v. Republic Truck Co., 241 Mass. 292, 135 N.E. 134; Samuels v. Hiawatha Holstein Dairy Co., 115 Wash. 343, 344, 197 P. 24; Dale v. Armstrong, 107 Kan. 101, 190 P. 598; Edwards v. Earnest, 206 Ala. 1, 89 So. 729, 22 A.L.R. 1387.”
It should be borne in mind that the accident in the pending case did not occur while Williams was driving the tractor in Bluefield for the personal convenience of Mrs. Clark and himself, which in no way served his employer’s business in the transportation of the tractor. While he was directed to drive the machine to Bluefield and keep it there until he finished his visit, it was not contemplated that he should use it for his personal business during the interval, especially as the company had a definite rule that none of its- vehicles should be used for other than company business. The visit, however, was ended and he was on his way to his ultimate destination when the accident occurred; and if the view be taken that the visit at Blue-field was not a separate or independent enterprise but merely a part of the whole journey which Williams was instructed to make, there was basis for the jury’s finding that he was within the course of his employment when, having finished his visit, he started on his way to Detroit. Hollen v. Reynolds, 123 W.Va. 360, 15 S.E.2d 163, is not to the contrary, for in that case, as the court pointed out, the employee was not returning to the master’s business after a deviation, but was merely making an unauthorized use of his employer’s car.
The judgment of the District Court is affirmed.
Question: What is the nature of the counsel for the respondent?
A. none (pro se)
B. court appointed
C. legal aid or public defender
D. private
E. government - US
F. government - state or local
G. interest group, union, professional group
H. other or not ascertained
Answer:
|
songer_constit
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the constitutionality of a law or administrative action, and if so, whether the resolution of the issue by the court favored the appellant.
BRUNSWICK CORPORATION, Appellant, v. Jerome DOFF, Appellee.
No. 79-3011.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Dec. 4, 1980.
Decided Jan. 30, 1981.
Timothy S. Harris, Los Angeles, Cal., for appellant.
Eric F. Edmunds, Jr., Los Angeles, Cal., on brief; John G. Wigmore, Los Angeles, Cal., argued, for appellee.
Before GIBSON, SNEED and TANG, Circuit Judges.
Honorable Floyd R. Gibson, Senior United States Circuit Judge for the Eighth Circuit, sitting by designation.
SNEED, Circuit Judge:
Jerome Doff appeals from a contempt order entered against him for failing to answer interrogatories propounded by Brunswick. He contends that the district court abused its discretion because he answered some interrogatories to the best of his ability and, as to the others, he validly invoked his Fifth Amendment privilege not to incriminate himself. Brunswick, on the other hand, argues that Doff waived his Fifth Amendment privilege because (1) the claim was untimely raised; (2) Doff failed properly to support his claim below; and (3) Doff initially answered the interrogatories. Brunswick further contends that the district court properly rejected Doff’s excuse that he could not answer further because his records had been stolen.
I.
Fifth Amendment Claim
We need address only the second of Brunswick’s claims with respect to Doff’s assertion of his Fifth Amendment privilege because, if correct as to it, the issue whether Doff has waived his privilege in one manner or another is irrelevant. We hold that Doff did fail properly to support his claim below. We do so on the basis that the privilege normally is not asserted properly by merely declaring that an answer will incriminate. It is not necessary, of course, that the person to whom the question has been put establish the precise manner in which he will incriminate himself by responding. This would make the privilege useless. As the Supreme Court said in Hoffman v. United States, 341 U.S. 479, 486-87, 71 S.Ct. 814, 818, 95 L.Ed. 1118 (1951):
To sustain the privilege, it need only be evident from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result.
Doff failed to meet this modest standard.
Interrogatories 30, 32, and 37 were directed specifically at what assets, if any, were owned by Doff. His initial answers left much to be desired in terms of specificity and made reasonable the district court’s order that additional answers be provided. The invocation of the privilege by Doff with respect to providing additional answers was accompanied by nothing other than a bald assertion of the privilege. In no way does it appear that more responsive answers would incriminate Doff. That such answers might assist Brunswick in collecting the amount of its debt does not amount to incrimination within the scope of the privilege. A debtor such as Doff cannot conceal such assets as he might own merely by uttering the incantation, “I hereby invoke the Fifth Amendment to the United States Constitution and thus refuse to answer this interrogatory on the grounds that my answer may tend to incriminate me.” Appendix B, Appellee’s Brief 52-54. It is not evident from the setting in which the questions were asked that responsive answers or explanations would incriminate. Cf. United States v. Neff, 615 F.2d 1235 (9th Cir. 1980).
Appellant argues strongly that, whatever might be the propriety of his invocation of the privilege with respect to interrogatories 30, 32, and 37, the refusal to answer interrogatory 69 on the grounds of the privilege was proper. That interrogatory asked whether Doff had filed federal and state income tax returns for the years 1971 through 1975, the date any such returns were filed, and the amount of adjusted gross income reported thereon. On the record before us we see no way in which answers to this interrogatory would tend to incriminate. Again a distinction between the unpleasantness of possibly revealing assets to a creditor and the tendency to incriminate within the meaning of the privilege must be drawn. While the possibility of the first is evident on this record, the second is not. Even responses indicating no returns had been filed would not on this record incriminate and, incidentally, would not be inconsistent necessarily with Doff's responses to interrogatories 30, 32, and 37.
We recognize that in cases such as this the need of the court to ascertain the legitimacy of a claim of the Fifth Amendment privilege exists in a state of tension with the need of the claimant to remain silent. The latter need must always weigh heavily in the balance, but it cannot be permitted to weigh so heavily as to relieve the court of its duty to determine the legitimacy of the claim. This would be the result were we to hold that a mere Fifth Amendment privilege incantation is sufficient. See United States v. Neff, supra at 1240.
II.
Adequacy of Doff’s Answers
The district court also appears not to have been impressed by the answers supplied to interrogatories 12,15, and 22 which sought information concerning the amounts and sources of various types of income of Doff. Nor need it have been inasmuch as Doff’s answers indicated that the amounts were insubstantial or “minimal” and that, in any event, his records had been stolen from his residence. Such responses are not marked with badges of candor.
III.
The Absence of Findings of Facts and Conclusions of Law
Our review in this case has been hampered somewhat by the absence of any findings of facts or conclusions of law prepared by the trial court. Such findings and conclusions are not required by Rule 52(a), Fed.R.Civ.P., in a proceeding such as this which was commenced by a motion by Brunswick for an order of contempt, a motion not embraced by Rule 41(b), Fed.R. Civ.P. Nonetheless, to require proper findings and conclusions is within the power of this court when a lower court has entered a contempt order. See Sanders v. Monsanto Co., 574 F.2d 198, 200 (5th Cir. 1978). Consideration was given to remanding for the preparation of findings and conclusions in this case. Our decision to affirm without a remand is based on the high level of contumacy on the part of Doff that this record reflects. Under less compelling circumstances a remand clearly would have been desirable.
Affirmed.
Question: Did the court's conclusion about the constitutionality of a law or administrative action favor the appellant?
A. Issue not discussed
B. The issue was discussed in the opinion and the resolution of the issue by the court favored the respondent
C. The issue was discussed in the opinion and the resolution of the issue by the court favored the appellant
D. The resolution of the issue had mixed results for the appellant and respondent
Answer:
|
songer_respond1_1_3
|
J
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". Your task is to determine what category of business best describes the area of activity of this litigant which is involved in this case.
BORG-WARNER ACCEPTANCE CORPORATION, a body corporate, Appellee, v. Anthony J. ROSSI, Individually and trading as Rossi Refrigeration Sales and Service, Appellant.
No. 73-1205.
United States Court of Appeals, Fourth. Circuit.
Argued Oct. 4, 1973.
Decided Nov. 5, 1973.
William F. Mosner, Towson, Md. (Joseph K. Pokorny, Towson, Md., on brief), for appellant.
Mitchell Stevan, Baltimore, Md. (Sagner, Stevan & Harris, Baltimore, Md., on brief), for appellee.
Before BRYAN, Senior Circuit Judge, and RUSSELL and WIDENER, Circuit Judges.
PER CURIAM:
Appellee Borg-Warner Acceptance Corporation held the promissory note, with supporting lien documents, representing the deferred balance of $16,323.-00 owing by Anthony J. Rossi to Cryocool, Inc. for the purchase price of certain refrigerator systems. Upon Rossi’s default in this obligation, appellee sued him in the District Court for this amount. From a judgment in favor of the appellee, Rossi appeals.
After review of the record and consideration of the arguments of counsel, on brief and orally, we affirm for reasons assigned in the opinion of the District Judge. Borg-Warner Acceptance Corporation, etc. v. Rossi, etc., 365 F.Supp. 56, D.C.M.D.1972.
Affirmed.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". What category of business best describes the area of activity of this litigant which is involved in this case?
A. agriculture
B. mining
C. construction
D. manufacturing
E. transportation
F. trade
G. financial institution
H. utilities
I. other
J. unclear
Answer:
|
songer_numappel
|
2
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Your specific task is to determine the total number of appellants in the case. If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
E. N. FUNKHOUSER and Estate of Nellie S. Funkhouser, Deceased, E. N. Funkhouser, Executor, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
No. 10330.
United States Court of Appeals Fourth Circuit.
Argued May 5, 1966.
Decided March 15, 1967.
Lawrence A. Kaufman, Baltimore, Md. (John W. Cable, III, and John S. McDaniel, Jr., Baltimore, Md., on brief), for petitioners.
Anthony Zell Roisman, Atty., Dept, of Justice (C. Moxley Featherston, Acting Asst. Atty. Gen., Lee A. Jackson and David O. Walter, Attys., Dept, of Justice, on brief), for respondent.
Before SOBELOFF and BRYAN, Circuit Judges, and FIELD, District Judge.
FIELD, District Judge:
This petition for review of a decision of the Tax Court of the United States presents as its only issue whether two lump-sum distributions received by petitioner, E. N. Funkhouser, during the year 1959 from a pension trust were paid to him “on account of * * * separation from the service” within the meaning of Section 402(a) (2) of the Internal Revenue Code of 1954 and therefore entitled to capital gain treatment, or were properly taxable as ordinary income. The Tax Court resolved this issue in favor of respondent and we affirm. There is no dispute as to the facts and they were stipulated in their entirety before the Tax Court.
Petitioner was a director and a principal executive officer of R. J. Funk-houser and Company, Incorporated, from January 2, 1929, the date of its incorporation under the laws of the State of Maryland, until October 31, 1958, when it ceased to exist by reason of its merger with The Funkhouser Company. He was also a director and a principal executive officer of The Funkhouser Company from October 6, 1927, the date of its incorporation under the laws of the State of Maryland, until January 5, 1959. The business of The Funkhouser Company consisted primarily of producing rock granules used in the manufacture of asphalt roofing and for other purposes, and the business of R. J. Funkhouser and Company, Incorporated, consisted principally of the sale of the products manufactured or produced by The Funkhouser Company. On October 1, 1958, the outstanding stock of both corporations was owned or controlled to a large degree by petitioner and R. J. Funkhouser together with members of their respective families.
On October 3, 1958, these two corporations entered into an agreement with The Ruberoid Co., a New Jersey corporation, under which agreement Rub-eroid was to acquire all of the assets of The Funkhouser Company and R. J. Funkhouser and Company, Incorporated, in exchange for shares of stock of Rub-eroid, and assumption of liabilities together with a cash payment sufficient to satisfy certain tax liabilities of the Funkhouser corporations. As a first step in carrying out this agreement with Rub-eroid, • R. J. Funkhouser and Company, Incorporated, was merged into The Funk-houser Company on October 31, 1958. Thereafter the agreement with Ruberoid was amended to some degree with respect to the elimination of any cash payment by Ruberoid to The Funkhouser Company and for the retention by the latter corporation of sufficient cash to pay its estimated tax liabilities. On December 24, 1958, the Commissioner of Internal Revenue issued a ruling letter to the effect that the merger of the two Funkhouser corporations and the proposed transfer of assets of the surviving corporation to Ruberoid constituted tax-free reorganizations. The transfer of assets by The Funkhouser Company to Ruberoid as well as the assumption of the liabilities pursuant to the agreement occurred on January 5, 1959, and thereafter Ruberoid operated the business theretofore conducted by The Funkhouser Company.
Pursuant to the agreement of October 3, 1958, The Funkhouser Company amended the certificate of incorporation on January 5, 1959, to change its corporate name to “E. N. Funkhouser & Co., Inc.” Also pursuant to the agreement, Ruberoid on or about February 15, 1959, issued 120,098 shares of its stock to E. N. Funkhouser & Co., Inc., in exchange for the assets transferred to it. One hundred and ninety-eight shares of this stock were sold and the proceeds used to defray certain expenses, and on March 9, 1959, the remaining 119,900 shares were distributed pro rata to the stockholders of E. N. Funkhouser & Co., Inc. Since the date of that distribution this corporation has been dormant and has not conducted any business although it has not been formally dissolved.
During the time of their active corporate existence, on December 20, 1946, R. J. Funkhouser and Company, Incorporated, and The Funkhouser Company each entered into separate pension trust agreements which established a non-contributory pension plan and trust for the benefit of the full time salaried employees of the respective corporations. Each such pension trust agreement was amended from time to time, and as so amended satisfied the requirements of Section 165 (a) of the Internal Revenue Code of 1939 and Section 401(a) of the Internal Revenue Code of 1954, at all times material hereto. Benefits were payable to a participating employee or his beneficiary in the event of the employee’s death, retirement or other termination of employment with the “Corporation,” as that term is defined in the respective pension trust agreements, or upon termination of the plan. Petitioner was an eligible employee under each pension trust agreement and the Trustee obtained income continuation policies for the purpose of providing to petitioner the benefits to which he was entitled under the pension trust agreements. Petitioner became 65 years of age in 1956 and thereupon became entitled to retirement benefits under the provisions of the pension trust agreements. However, the benefits payable to him were postponed in accordance with the terms of the agreements, and no contributions were thereafter made in behalf of the petitioner by either “Corporation.”
Each of the pension trust agreements provided that in the event the “Corporation” should be dissolved or merged into or with another corporation which did not assume the obligation of the pension trust, the pension trust would automatically terminate. By agreement dated October 31, 1958, between R. J. Funkhouser and Company, Incorporated, and The Funkhouser Company, it was provided that upon the merger of these corporations becoming effective the obligations of R. J. Funkhouser and Company, Incorporated, under its pension trust agreement would be assumed by The Funk-houser Company and such pension trust would be consolidated into and become a part of the pension trust of The Funk-houser Company. The Trustee under both such pension trust agreements consented thereto and agreed to be bound by its provisions.
On December 19,1958, The Funkhouser Company and the Trustee executed amendments to the pension trust agreement of The Funkhouser Company, the purpose of which was to provide for the contemplated assumption by Ruberoid of the obligations of The Funkhouser Company under such pension trust agreement upon the transfer to Ruberoid of all of the assets of The Funkhouser Company. The amendments were, in part, as follows:
“3
The preamble to such Pension Trust Agreement (being the paragraph entitled ‘Parties to the Agreement’) shall be amended by inserting in the first parenthetical phrase immediately following the word ‘Corporation’ the following words ‘which term shall also be construed to mean and include in substitution for The Funkhouser Company any corporation which shall have purchased all or substantially all of the assets of The Funkhouser Company and which shall have become the employer of substantially all of its employees and which shall assume the obligation of this Pension Trust.’
“4
Paragraph NINETEENTH shall be amended by adding at the end thereof the following sentence:
“ ‘Notwithstanding anything to the contrary heretofore in the Paragraph NINETEENTH contained this Pension Trust shall not terminate and no distribution of its assets by the Trustee shall be made upon the dissolution, bankruptcy, insolvency or merger, as aforesaid, of The Funkhouser Company if prior to the occurrence of any of such events any other corporation shall have been substituted for The Funk-houser Company as the Corporation hereunder.’ ”
Prior to October 3, 1958, Ruberoid had in effect a qualified contributory pension plan, providing for retirement benefits for its employees. In connection with the acquisition of the assets of The Funk-houser Company by Ruberoid, Ruberoid on or before January 5, 1959, (a) amended such existing qualified pension plan so as to make provisions for the former employees of The Funkhouser Company who became employed by it following the acquisition of such assets; (b) assumed the pension trust agreement of The Funk-houser Company, as amended to include the pension trust agreement of R. J. Funkhouser and Company, Incorporated, as well as the obligations thereunder and became the “Corporation” as that term was defined in said pension trust agreement as amended; and (c) placed all of the annuity contracts held by the Trustee under the pension trust agreement of The Funkhouser Company on a paid-up basis to be held for distribution to the employees upon termination of their employment.
On March 9, 1959, the administrative committee of the retirement plan for employees of Ruberoid issued a direction that any Ruberoid employee who was formerly an employee of The Funkhouser Company and who, on December 31, 1958, was enrolled and participated in The Funkhouser Company pension trust agreement and who had attained the age of 60% years, but had not attained the age of 65 years, should be eligible to enroll as a contributing participant in the retirement plan of the employees of Rub-eroid. On August 26, 1959, the pension trust agreement originally made between The Funkhouser Company and the Trustee was further amended by agreement between Ruberoid and the Trustee to provide for the handling of dividends and refunds on the annuity contracts held thereunder and for the distribution of such contracts upon any termination of employment.
On January 5, 1959,- there were 174 employees of The Funkhouser Company under the age of 65 for whose benefit annuity contracts were held under The Funkhouser Company pension trust agreement, as amended to include the pension trust agreement of R. J. Funk-houser and Company, Incorporated. In addition, annuity contracts were also held for the benefit of the petitioner and R. J. Funkhouser, both of whom were then over 65 years of age. There were no other employees of The Funkhouser Company, including former employees of R. J. Funkhouser and Company, Incorporated, who had attained the age of 65 years on January 5, 1959. Subsequent to January 5, 1959, a substantial number of former employees of The Funkhouser Company retired or otherwise ceased to be employed by Ruberoid and received a distribution of benefits under The Funkhouser Company pension plan. The Funkhouser Company pension trust agreement as assumed by Ruberoid continued in effect and existence, and as of October 30, 1964, the Trustee thereunder held annuity contracts for the benefit, of the 70 former employees of The Funk-houser Company who were still employed by Ruberoid at that time.
Petitioner became employed by Rub-eroid as a director and consultant as of the effective date of the acquisition by Ruberoid of the assets of The Funk-houser Company, and continued to be so employed during the calendar years 1959, 1960 and 1961, receiving compensation from Ruberoid for his services at the rate of $15,000 per year. Subsequent to 1961, the petitioner served Ruberoid' only in the capacity of a director receiving only director’s fees in connection therewith. Since petitioner was over 65-years of age on January 1, 1959, he was not eligible to participate in the Ruberoid pension plan and, accordingly, was never covered by that plan.
Subsequent to April 10, 1959, and prior-to June 4, 1959, petitioner requested the-Trustee under the former Funkhouser pension trust agreement to surrender one of the policies carried for petitioner’s benefit thereunder for cash, and on August 19, 1959, he made a similar request of the Trustee with respect to the second policy carried for his benefit under the agreement. Pursuant to these requests the Trustee surrendered the policies and on or about June 4, 1959, delivered to petitioner a check in the amount of $16,-854.30, and on or about October 15, 1959, the Trustee delivered to petitioner a second check in the amount of $39,906.83.
The aggregate amount of $56,761.13 so received by petitioner was reported on his 1959 joint return as a long-term capital gain. Respondent determined a deficiency against the taxpayers for that year, proposing that the distributions were taxable as ordinary income which resulted in a disputed tax item of $27,-.374.35.
As heretofore stated, the parties stipulated that the pension trust agreements of both Funkhouser corporations were ■qualified under Section 165(a) of the Internal Revenue Code of 1939 and Section 401(a) of the Internal Revenue Code of 1954, at all times material hereto, so that all pension trust distributions would be taxable at ordinary income rates under Section 402(a) (1) of the 1954 Code, except as provided in Section 402(a) (2) .as follows:
“§ 402. Taxability of beneficiary of employees’ trust
“(a) Taxability of beneficiary of exempt trust. — •
* * -x- * * *
“(2) Capital gains treatment for certain distributions. — In the case of an employees’ trust described in section 401(a), which is exempt from tax under section 501(a), if the total distributions payable with respect to any employee are paid to the distributee within 1 taxable year of the distributee on account of the employee’s death or other separation from the service, * * * the amount of such distribution, to the extent exceeding the amounts contributed by the employee * * * shall be considered a gain from the sale or exchange of a capital asset held for more than 6 months.
* * *»
The legislative background and the history of the somewhat controversial interpretation of this Section have been set forth in United States v. Johnson, 331 F.2d 943 (5 Cir. 1964) and need not be reviewed by us in the disposition of the present case.
Petitioner relies to a large degree on the cases of Mary Miller, 22 T.C. 293 (1954), aff’d 226 F.2d 618 (6 Cir. 1955) and Lester B. Martin, 26 T.C. 100 (1956), but we agree with the Tax Court that the principle of those cases does not support petitioner’s position on the facts presented here. The rationale of those" decisions was succinctly stated in Thomas E. Judkins, 31 T.C. 1022 (1959) at 1028:
“Both this Court and the Internal Revenue Service have recognized the plight of employee-participants in retirement plans that have been terminated due to a bona fide change in the ownership of the business and have found a ‘separation from the service’ within the meaning of this Code provision even though the employees in fact continued in their same jobs with the new owners.”
While it is true that in the present case there was a bona fide change in the ownership of the business, it is clear that the corporate principals carefully and specifically took the contractual steps necessary to continue the Funkhouser pension trust in existence under Ruberoid, and by virtue thereof on or before January 5, 1959, Ruberoid became the “Corporation” under the terms of the Funkhouser pension trust agreement. The trust was in nowise terminated incident to the change of business ownership, and petitioner continued in the employ of Ruberoid in fact as well as in respect of the pension trust. Under these circumstances petitioner falls well within the pattern of those eases in which Section 402(a) (2) has been held inapplicable. See Rybacki v. Conley, 340 F.2d 944 (2 Cir. 1965); Clarence F. Buckley, 29 T.C. 455 (1957); Edward Joseph Glin-ske, 17 T.C. 562 (1951).
Additionally, assuming, arguendo, that the petitioner was separated from the service of The Funkhouser Company, we agree with the Tax Court that he has failed to carry his burden of proving that the distributions in question were made to him “on account of” such separation. As pointed out in the stipulated facts, petitioner had attained the requisite retirement age of 65 in the year 1956, and was entitled to his full retirement benefits under the agreements at that time. The payment of such benefits was postponed pursuant to section “Eleventh” of the agreements merely because it was the desire of the petitioner to continue in the active employment of the corporation. At any time after 1956, petitioner could have obtained his full retirement benefits under the pension trust by terminating his active employment, an election that rested solely in him both before and after the Ruberoid transaction. The fact that for some unexplained reason the Trustee complied with petitioner’s requests and made the distributions to him while he was still an active employee of Ruberoid and while the pension trust was still in existence indicates to us that the distributions were made “on account of” something other than his “separation from the service.” Cf. Estate of Frank Fry, 19 T.C. 461, aff’d. 205 F.2d 517 (3 Cir. 1953).
In any event, it is clear that section 402(a) (2) does not apply to the distributions here in question.
Affirmed.
. Petitioner and his wife, Nellie S. Funk-houser, filed joint returns with the district director at Baltimore. The wife has since died, and the petitioner appeared before the Tax Court both in his own right and as executor of his wife’s estate.
Question: What is the total number of appellants in the case? Answer with a number.
Answer:
|
songer_weightev
|
A
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?" This includes discussions of whether the litigant met the burden of proof. Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
DOGGETT v. CHELSEA TRUST CO.
No. 2908.
Circuit Court of Appeals, First Circuit.
Nov. 10, 1934.
Harry Shapiro, of Boston, Mass. (Alexander C. Gould, of Boston, Mass., on the brief), for appellant.
Lafayette R. Chamberlin, of Boston, Mass. (Chamberlin, Stone & Bosson, of Boston, Mass., on the brief), for appellee.
Before BINGHAM, WILSON, and •MORTON, Circuit Judges.
WILSON, Circuit Judge.
This is an appeal from an order of the District Court of Massachusetts affirming the orders of a referee in bankruptcy.
From the pleadings set forth in the record, it appears that the H. T. West Company, which hereinafter will be referred to as the West Co., filed a voluntary petition in bankruptcy on August 23, 1932, and on the same day it was adjudicated a bankrupt, and the case was referred to a referee in bankruptcy. On September 20, 1932, the appellant was appointed trustee of the estate of the bankrupt.
On September 14 the appellee, which hereinafter will be referred to as the Trust Company, filed a petition with the referee setting forth that in the regular course of business it had loaned the bankrupt money and taken notes as evidence of said loan with an assignment of accounts receivable as collateral security; that the trustee since his appointment had collected said accounts receivable and had refused to turn over iho sums so collected to the Trust Company, and prayed that the trustee be ordered to turn over the proceeds thereof to the Trust Company.
To this petition the trustee answered, admitting Hint lie had collected certain of the accounts receivable, but with ihe approval of the court and consent of the Trust Company, and that he was holding the proceeds subject to the order of (lie court; but set forth that within four months of the filing of iho petition in bankruptcy the bankrupt had transferred property to the Trust Company under conditions which resulted in giving ihe Trust Company a preference over oilier creditors and prayed that such transfer be declared to be a voidable preference.
The trustee also filed a petition with the referee alleging that the Trust Company had in its possession approximately $1,700 represented by certificates of deposit, whieh had been improperly withhold by the Trust Company; that since the filing of the petition in bankruptcy it had collected the sum of $115.91 oil a certain trade acceptance, ihe proceeds of which it had improperly withheld from the trustee; and that the Trust Company had also improperly withheld deposits made by the bankrupt prior to the filing of its petition in bankruptcy in the amount of approximately $3,3ol.
The referee heard those petitions by agreement of the parties, who waived all questions as to pleadings and jurisdiction, and, in general, found that the Trust Company was entitled to apply in payment of a $5,000 note, though not yet due, the deposits of $3,361.91, and ihe $1,704.78 alleged to be held on certificates of deposit, and that it was entitled to have the trustee turn over to it the sum of $4,920.67, whieh it was agreed that the trustee had collected on the assigned accounts receivable, less the sum of $115.91 collected by the Trust Company on the trade acceptance, and ihat the Trust Company was entitled to collect the remainder of the accounts receivable assigned to it prior to bankruptcy and after liquidation of all the indebtedness of the bankrupt, pay any balance to the trustee.
On the petition of the trustee for a review of the referee’s order, the referee certified to the District Court his findings of fact, whieh, in substance, are as follows:
-//,/The Trust Company had been lending money to the West Co. for about twelve years. On April 7, 1932, two unsecured notes of $5,000 each fell due. Following a practice of long standing, the West Co. substituted two new notes, unsecured, for $5,000 each, and payable on July 7, 1932. Shortly after this, and before April 28, 1932, the West Co. asked for a new loan. By this time the bank had come under new management. A new president insisted upon an examination of the affairs of Iho West Co., and it was found that the West Co. was borrowing from a New York finance company on accounts receivable. The Trust Company refused to go on if thé West Co. continued to pledge its «accounts receivable to outside finance compiinies. The new president demanded that the West Co. must do all of its business with the Trust Company, or none. Accordingly, it was arranged for the Trust Company to advance about $4,500 with which the- West Co. paid off the New York finance company and got back the receivables previously pledged to that company. The Trust Company then insisted that the West Co. take up one of the $5,000 unsecured notes whieh was not due until July 7, 1932, and substitute therefor a collateral note for $5,000, secured by a second mortgage on some property in Winchester. This new note was dated April 28, 3932, and made payable July 28, 1932.
After this new arrangement the Trust Company made loans to the West Co. from time to time on accounts receivable to the extent of 65 per cent, of their face value, taking in each instance an assignment of such receivables to secure the advances made. The Trust Company, however, allowed the West Co. to collect the assigned receivables and to keep 35 per cent, of the amount so collected; the remaining 65 per cent, being paid to the Trust Company in reduction of its loans.
On «July 7, 1932, when the second $5,000 unsecured note fell due, the Trust Company demanded and received a note in collateral form, which became due October 7, 1932, and whieh provided that any moneys or other property of the maker in the possession of the Trust Company might at all times at the option of the Trust Company be held and treated as collateral for its payment. When the note of $5,000 secured by the Winchester mortgage came due on July 28, 1932, it was also renewed for three months in collateral form. Thereafter business between the Trust Company and the West Co. continued «as usual, and the Trust Company continued to advance substantial sums on receivables «assigned as security.
On August 13, 1932, the treasurer of the West Co. informed the Trust Company that the West Co. had to have about $5,000 more to pay a creditor who was pressing for payment. At this time the West Co., in addition to the $10,000 evidenced by the two collateral notes, owed the Trust Company $7,842 for new money advanced on assigned accounts receivable as security. The Trust Company refused to make further loans to the West Co. and proceeded to liquidate its loans.
On August 15 following, the Trust Company applied the entire amount which the West Co. had on deposit subject to cheek, viz., $3,361.91, in liquidation of the $5,000 collateral note due October 7,1932.
The Trust Company also proceeded to collect the receivables assigned to it. There was evidently an understanding between the parties that the 35 per cent, which had previously been retained by the West Co. should now be held by the Trust Company in a separate ' fund, against which the Trust Company would issue certificates of deposit. No certificates of deposit, however, were ever issued to the West Co. The 35 per cent, of the receivables collected by the Trust Company before a receiver- was appointed for the West Co. amounted to $1,704.78. The Trust Company at some time after the adjudication of bankruptcy, and before the appointment of the trustee, applied this sum to the liquidation of the collateral note due October 7, 1932, which sum, together with the amount of the checking account already applied by the Trust Company to this note, was sufficient to pay it in full.
Upon these facts the referee found there was no preference received by the Trust Company as a result of these transactions, and held that the terms of the collateral notes given on July 7 and July 28 were broad enough to permit the Trust Company to apply both the sum on deposit subject to check and all sums collected on the receivables in liquidation of the indebtedness of the bankrupt. The District Court by its order affirmed the •order of the referee, though in its memorandum of decision it inadvertently stated that the referee’s order permitted the Trust Company to retain also the sum of $115.91 collected on the trade acceptance after the filing of the petition in bankruptcy, although the referee expressly stated in his order that the trustee in bankruptcy was entitled to have turned over to him this sum. We think the District Court’s order must be understood as being modified to this extent,
The notes of July 7 and July 28 did not increase the indebtedness of the bankrupt. They were given for a valid consideration, viz., the discharge of a prior note for the same amount. No preference resulted in giving these notes. The application by the Trust Company of the deposits on hand on August 15 of $3,361.91 was warranted, we think, by the Trust Company’s right of set-off under the Bankruptcy Act (11 USCA).
No reasonable objection could be raised by a trustee in bankruptcy to the Trust Company availing itself of this right of set-off under the circumstances of this case, since, as trustee in bankruptcy, he would have been obliged to allow it after adjudication. While the authorities do not appear to be entirely in accord as to the right of set-oil in all eases against notes not due, there are authorities which sustain such right of set-off by a bank under sections 63 and 68 of the Bankruptcy Act (11 USCA §§ 103,108), especially where the insolvency of the debtor is apparent and bankruptcy later follows. Rupp v. Commerce Guardian Trust & Savings Bank (C. C. A.) 32 F.(2d) 234; Germania Savings Bank & Trust Co. v. Loeb (C. C. A.) 188 F. 285; American Bank & Trust Co. v. Morris (C. C. A.) 16 F.(2d) 845; Putnam v. United States Trust Co., 223 Mass. 199, 202, 111 N. E. 969; Carr v. Hamilton, 129 U. S. 252, 256, 9 S. Ct. 295, 32 L. Ed. 669; Federal Reserve Bank of Minneapolis v. First National Bank of Eureka, S. D. (D. C.) 277 F. 300, 302, 303.
There is no ground for a contention that the deposits amounting to $3,361.91 were made except in the usual course of business and were subject to cheek. From July 7 to August 13 the bankrupt did business as usual, making deposits and issuing cheeks against the deposit, which were honored by the Trust Company. There are no facts certified to by the referee that require the inference that it received them for the purpose of building up a deposit to set off against the depositor’s notes, or that the depositor had any intent to thereby give the Trust Company a preference over other creditors. Plymouth County Trust Co. v. MacDonald (C. C. A.) 60 F.(2d) 94, 95; Fourth National Bank of Wichita, Kan., v. Smith (C. C. A.) 240 F. 19.
As to the application of the $1,700 item, a different situation arises. The right to offset this sum against the indebtedness of the bankrupt must depend on the terms of the collateral notes and of the assignment of the accounts receivable, or an equitable right of set-off. Scott v. Armstrong, 146 U. S. 499, 13 S. Ct. 148, 36 L. Ed. 1059; Putnam v. United States Trust Co., supra; Schuler v. Israel, 120 U. S. 506, 510, 7 S. Ct. 648, 30 L. Ed. 707; 24 R. C. L. 843; Nashville Trust Co. v. Nashville Fourth National Bank, 91 Tenn. 336, 18 S. W. 822, 15 L. R. A. 710.
The collateral notes were general in form and were drafted to apply also to other situations than those present here, and contained the following provisions, which are applicable to the facts in this case:
“It is further agreed that any moneys or other property at any time in the possession of the Trust Company belonging to any of the parties liable hereon to the Trust Company, as maker or endorser or guarantor, and any deposits, balance of deposits, or other sums at any time credited by or due from the Trust Company to any of said parties, inay at all times at the option of the Trust Company, be held and treated as collateral security for the payment of this note or any other liability of the maker hereof to the Trust Company, whether due or not due, and the Trust Company may at any time at its option set off the amount due or to become due hereon against any claim of any of said parties against the Trust Company.” (Italics supplied.)
The assignment of the accounts receivable was given for a valid consideration, viz., a loan of 65 per cent, of their face, and under its terms the Trust Company was entitled to collect the entire amount and apply it on the loans to secure which they were assigned as collateral, at least until fully paid. The assignor was entitled to any balance, unless the collateral notes given July 7 and July 28 gave to the Trust Company the right to retain any such balance and apply it on the notes of July 7 and July 28.
Until August 13, 1932, there was no apparent change in the business relations between the Trust Company and the bankrupt. The Trust Company, no doubt, from the fact that it was requiring collateral on all its loans, had become satisfied in April, 1932, that the bankrupt’s credit w'as somewhat impaired, but it does not follow that it had become convinced that the West Co. was insolvent and would not eventually meet its obligations. Conservative banking alone required that it protect its future loans.
On August 13, however, it was faced with the proposition that the West Co. needed $5,-000 to meet the demands of a creditor who was pressing for payment. It already owed the Trust Company nearly $18,000. We think the Trust Company was then warranted in concluding that the West Co. was insolvent, as it was later conclusively shown to be by its voluntary petition in bankruptcy filed ten days thereafter.
What the actual status of the $1,700 item was at the time of the adjudication of bankruptcy, or when a receiver was appointed, is not clear from the record. The Trust Company on August 15 took over the collection of the accounts receivable, as it had a right to do under the assignments; there being nothing in the written assignment to the contrary, or permitting the West Co. to collect. While the referee found that some arrangement was made by which the Trust Company agreed to retain 35 per cent, in a special fund and issue certificates of deposit therefor, it was not required to do so by the terms of the assignment. No certificates of deposit against this fund were ever issued; but at some time, either upon the adjudication of bankruptcy, or the appointment of a receiver, the Trust Company applied this $1,700 item on the note of the bankrupt dated July 7, 1932. That it was not then due is no ground of objection to this procedure, since, if not a preference, they were a proper set-off under sections 63 and 68 of the act (11 USCA §§ 103, 108); an adjudication in bankruptcy having taken place. New York County National Bank v. Massey, 192 U. S. 138, 24 S. Ct. 199, 48 L. Ed. 380; Studloy v. Boylston National Bank, 229 U. S. 523, 33 S. Ct. 806, 57 L. Ed. 1313; Fourth National Bank v. Smith, supra. This procedure by the Trust Company was also warranted by the terms of its collateral notes.
The assignment of the accounts receivable in good faith as security for a present loan cannot be held to be a preference, even if made within four months of bankruptcy. The giving of a new note for an old matured note within four months of a petition in bankruptcy is not a preference, nor does the fact that it contained a provision that any collateral held by the payee, or any funds which came into its hands should be applied in payment, constitute a preference unless the debtor was insolvent, and the creditor had reasonable grounds to believe it would effect a preference. Sections 60a and 60b of the act (11 USCA § 96 (a,b); Peck & Co. v. Whitmer (C. C. A.) 231 F. 893; Essley Machinery Co. v. Belsley (C. C. A.) 235 F. 285. That the collateral notes were not given to prefer the Trust Company over other creditors, or that they were procured by the Trust Company for that purpose, is evidenced by the fact that up to August 15 the Trust Company permitted the bankrupt to collect the accounts receivable and retain 35 per cent, thereof, paying the balance only to the Trust Company. The burden of proving the facts constituting a voidable preference was on the trustee.
These facts the referee must have found in favor of the Trust Company. The evidence on which the referee based his findings of fact is not before this court, but we see nothing in the pleadings or the certificate of facts by the referee to require a contrary finding by the District Court, or this court.
If the accounts receivable were assigned for a valid consideration and no preference resulted from the giving of the collateral notes, then the Trust Company was entitled to collect the entire receivables and apply them to any indebtedness of the bankrupt. The order of the referee to that effect, therefore, was properly affirmed.
Except as to the item of the trade acceptance amounting to $115.91, the order of the District Court is affirmed, with costs, and the case is remanded to that court for further proceedings not inconsistent with this opinion.
Question: Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_constit
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the constitutionality of a law or administrative action, and if so, whether the resolution of the issue by the court favored the appellant.
LUCE & CO., Limited, v. REGISTRAR OF PROPERTY OF GUAYAMA.
Circuit Court of Appeals, First Circuit.
June 16, 1927.
No. 2006.
Courts <@=405(12) — Circuit Court of Appeals has no jurisdiction of appeal from decision affirming registrar of property of Guayama’s action denying record of deed (Const. U. S. art. 3, §§ f, 2; Organic Act Porto Rico, § 43; Civ. Code Porto Rico,' § 1362, subsec. 2; Compilation of Rev. St. and Codes of Porto Rico, § 6750).
Circuit Court of Appeals held not to have jurisdiction, under Const. U. S. art. 3, §§ 1, 2, and Organic Act Porto Rico, § 43, of appeal from decision of Porto Rican Supreme Court, affirming action of registrar of property of •Guayama, denying admission to record of a certain deed as void under Civ. Code Porto Rico, § 1362, subsec. 2, since, in view of Compilation of Rev. St. and Codes of Porto Rico, § 6750, rights of parties under deed are in no wise determined by action of registrar in recording or denying record thereto, in that an action may be brought in a court of justice to establish validity of instrument or obligation.
Appeal from the Supreme Court of Porto Rico.
Application by Luce & Co., Limited, to the Supreme Court of Porto Rico, asking for tbe disaffirmance of the action of the Registrar of Property of Guayama, denying admission to record of a certain deed. From a decree affirming such decision, petitioner appeals.
Appeal dismissed.
Joseph H. Beale, of Cambridge, Mass. (Jose Tous Soto, of Ponce, Porto Rico, and Arthur H. Weed, Sydney Fairbanks, and Herrick, Smith, Donald. & Farley, all of Boston, Mass., on the brief), for appellant.
William C. Rigby, of Washington, D. C. (George C. Butte, Atty. Gen., of Porto Rico, and Russell H. Brennan, of Washington, D. C., on the brief), for appellee.
Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.
JOHNSON, Circuit Judge.
This is an appeal from a decree of the Supreme Court of Porto Rico affirming the decision of the registrar of property of Guayama, denying admission to record of a deed in which Charles L. Carpenter, as attorney in fact of the owners of certain joint interests in a plantation in Porto Rico, is the grantor, and the appellant, a partnership in which the said Charles L. Carpenter is a member and managing partner, is the grantee. This action was taken by the registrar because of a decision that the deed was void, because of subsection 2 of section 1362 of the Civil Code of Porto Rico, which is as follows:
Section 1362, Civil Code: “The following persons cannot acquire by purchase, even at public or judicial auction, neither in person nor by an agent: * * *
“2. Agents, the property the administration or sale of which may have been entrusted to them.”
By act of the Legislative Assembly of Porto Rico approved March 1, 1902 (Laws 1902, p. 289 [Revised Statutes of Porto Rico, § 2180]), it is provided in section 1 as follows:
“That when any registrar of property refuses absolutely or provisionally to record or to give its full legal effect to any document which may be presented to him for recording or for the annotation of the contents thereof, whether it be a deed, a decree, a mortgage, a satisfaction of a mortgage or any other document which he is required by law either to record or to enter, he shall set out clearly and concisely at the foot of the document his reasons for the refusal and shall serve notice of his action upon the interested party accompanied by a copy of his written reasons for the refusal.”
This act further provides that the party interested may apply to the Supreme Court of Porto Rico to affirm or reverse the action of the registrar. In case the decision of the registrar is affirmed the Supreme Court may in its discretion impose costs upon the party taking the appeal, or, if the decision of the registrar is reversed, upon the registrar and require him to enter the deed for record.
Section 9 of the same act is as follows:
“Issues of law or of fact as to the effect upon the title to real estate or rights therein as affected by priority or preference between or among documents of title or priority in the recording or the entry of the same shall be decided by declaratory actions in the tribunals of justice.”
Section 6750 of the Compilation of the Revised Statutes and Codes of Porto Rico in force on March 9, 1911, is as follows:
“Interested parties may take an administrative appeal from the decision of the registrar classifying an instrument, the taking of such an appeal not being a bar to their right to resort to the courts of justice, if they so desire, for the purpose of discussing and contending among themselves as to the validity or nullity of the documents or the obligation. If the record should be suspended on account of curable defects in the instrument, and a cautionary notice is not requested, the persons interested may correct the defects within the 30 days that the entry of presentation is effective. If the cautionary notice is entered the correction may be made within the time it remains in force according to article 96.
“If the record shall have been denied, and the person interested shall bring an action in a court of justice within 30 days from the date of the record of presentation seeking the establishment of the validity of the instrument or of the obligation, he may request that a cautionary notice of the action be entered, and the entry made shall be effective from the date of the record of presentation.”
Under the provisions of this act, the appellant brought before the Supreme Court of Porto Rico the action of the registrar in this ease,_ asking for its disaffirmance. That court, in a divided opinion, has sustained the action of the registrar, and has allowed an appeal to this court. In the order allowing the appeal it is stated that there is a division of opinion between the justices of the Supreme Court, two of the justices holding that an appeal does not lie, three other justices thinking that it is a new question involving the jurisdiction of this court and therefore should be left to its decision, but stating that they have doubts as to whether or not the judgment is appealable.
The question of the right of appeal has been fully and ably argued by counsel, and in a dissenting opinion Associate Justice Wolf, of the Supreme Court of Porto Rico, has assembled the authorities bearing upon the right of appeal in such a ease. If this court has jurisdiction of-the appeal, it is because it is granted by sections 1 and 2 of article 3 of the Constitution of the United States, and also of section 43 of the Organic Act of Porto Rico. By section 2 of article 3 of the Constitution of the United States it is provided in part as follows:
Section 2: “The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority; * * * to controversies to which the United States shall be a party; * * * between citizens of different states; between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, citizens, or subjects.”
Section 43 of the Organic Act of Porto Rico is as follows:
“Writs of error and appeals from the final judgments and decrees of the Supreme Court of Porto Rico may be taken and prosecuted to the Circuit Court of Appeals for the First Circuit and to the Supreme Court of the United States, as now provided by law.”
It is conceded that, if this appeal is not one in a case of law or equity, this court does not have jurisdiction. To constitute a case, it must be one in which legal rights are ascertained and determined, and a suit in equity is one in which relief is sought according to the rules and practices of the equity jurisdiction as established in English jurisprudence. Nothing was determined by the registrar, except the right to record of the deed presented. Rights of parties under the deed may be determined in a court of law, notwithstanding any action in regard to the record which may be taken by the registrar. The case is ruled by Postum Cereal Co. v. California Fig Nut Co., 272 U. S. 693, 47 S. Ct. 284, 71 L. Ed.-, in which the earlier pertinent cases are cited and reviewed. The rights of the parties under this deed are in no wise determined under the Porto Rican statutes by the action of the registrar in recording or denying record to a deed. There is, therefore, no ease presented to us upon appeal which involves the judicial determination of a right in rem or in personam.
The appeal is dismissed for lack of jurisdiction.
Question: Did the court's conclusion about the constitutionality of a law or administrative action favor the appellant?
A. Issue not discussed
B. The issue was discussed in the opinion and the resolution of the issue by the court favored the respondent
C. The issue was discussed in the opinion and the resolution of the issue by the court favored the appellant
D. The resolution of the issue had mixed results for the appellant and respondent
Answer:
|
songer_usc1
|
28
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited title of the U.S. Code in the headnotes to this case. Answer "0" if no U.S. Code titles are cited. If one or more provisions are cited, code the number of the most frequently cited title.
CUMMINGS v. MOORE.
No. 4476.
United States Court of Appeals Tenth. Circuit.
Feb. 4, 1953.
Rehearing Denied March 20, 1953.
Milton W. Hardy, Tulsa, Okl. (Hardy & Hardy, Tulsa, Okl., were with him on the brief), for appellant.
Jack N. Hays, Tulsa, Okl. (G. Ellis Gable and Charles P. Gotwals, Jr., Tulsa, Okl., were with him on the brief), for ap-pellee.
Before PHILLIPS, Chief Judge, and BRATTON and MURRAH, Circuit Judges.
BRATTON, Circuit Judge.
This was an action instituted in the United States Court for Northern Oklahoma by W. D. Moore against William G. Cummings for a declaratory judgment determining and adjudicating that plaintiff was not infringing Letters Patent No. 2,496,381, issued to defendant, and relating to a brush for the application of tool joint dressing in oil field drilling operations. It was alleged in the complaint that both parties to the action were citizens of Oklahoma, and that the cause of action was one arising under the laws of the United States, namely 28 U.S.C. §§ 1338, 2201. It was further alleged that defendant claimed to be the owner of the patent; that he asserted infringement on the part of plaintiff; that plaintiff — not defendant — was the inventor of the brush covered by the patent; and that plaintiff was the equitable owner of the patent and therefore could not be guilty of infringing it. And it was further alleged that defendant had been an employee of plaintiff; that defendant’s duties as such employee were to sell and promote the sale of products of W. D. Moore Company in the oil field business; that in accordance with his duties, defendant called to the attention of plaintiff the need for a brush with which to apply tool joint dressing in drilling operations; that thereupon plaintiff developed and worked out a brush devised for such purpose; that shortly after developing such brush, plaintiff began its manufacture; that it was advertised and sold under the name of W. D. Moore Company, defendant actively engaging in the sale thereof; that defendant secretly and in derogation of his duties as employee of plaintiff applied for a patent on the brush in his name; that the application resulted in the issuance of the patent in suit; that defendant had communicated with customers of plaintiff and W. D. Moore Company stating that he was the inventor and owner of the patent and that plaintiff was infringing it; that customers of plaintiff and W. D. Moore Company had become confused by such statements; that in reliance upon such statements, a number of such customers had stopped ordering such brushes from plaintiff and W. D. Moore Company; that the confusion and loss of sales had caused damage to plaintiff for which he had no adequate remedy at law; and that a controversy existed between the parties in respect to defendant’s claim of infringement. The prayer was that plaintiff be declared and decreed to be the lawful owner of the patent; that plaintiff be declared not guilty of infringing the patent; that defendant be declared and decreed to have no right in the patent; that defendant be required to convey and assign the patent to plaintiff; that defendant be enjoined from interfering with plaintiff’s production and sale of the brush; that defendant be further enjoined from manufacturing, producing, selling, and distributing the brush; and that defendant be required to account to plaintiff for profits derived from the sale of the brush.
Defendant answered, admitting citizenship of the parties as alleged in the complaint; admitting issuance of the patent and his assertion of infringement on the part of plaintiff; pleading that all other matters and allegations contained in the complaint were compromised and settled by written agreement of the parties, a copy of the agreement being attached to the answer; pleading that there was another action between the parties arising out of the same subject matter pending in the state court and that precedence in the trial of the two cases should be accorded the state court; and pleading that the court was without jurisdiction of the alleged cause of action set forth in the complaint and of the parties to the action.
The court found that the defendant claimed to be the sole inventor of the brush; that he had charged plaintiff with the infringement of the patent; and that defendant was not the sole inventor of the brush referred to in the patent. The court concluded that the action was one for a declaratory judgment under the patent laws of the United States; that the court had' jurisdiction of the subject matter of the action and of the parties thereto; that since defendant was not the sole inventor of the brush, the patent was void and conferred no rights; and that an invalid patent may not be infringed. Judgment was entered accordingly, and defendant appealed. For convenience, continued reference will be made to the parties as plaintiff and defendant, respectively.
The jurisdiction of the trial court of the subject matter of the action is challenged. It is argued that a complaint alleging breach of confidential relation in patent matters, without alleging diversity of citizenship and the requisite amount in controversy, fails to state a cause of action of which a United States Court has jurisdiction under the patent laws or under the Declaratory Judgment Act. In the absence of diversity of citizenship with the requisite amount in controversy, a United States Court does not have jurisdiction under the patent laws of an action in which the gravamen of the claim pleaded in the complaint is that a confidential relation existed between plaintiff and defendant; that in wrongful disregard of the relation defendant obtained a patent upon the invention of plaintiff; that defendant is trustee ex maleficio for plaintiff in respect to the ownership of the patent; and that defendant should be required to deliver o to plaintiff an assignment of such patent. The general equitable right of plaintiff in an action solely and exclusively of that nature is independent of the patent laws. Becher v. Contoure Laboratories, Inc., 279 U.S. 388, 49 S.Ct. 356, 73 L.Ed. 527; Eckert v. Braun, 7 Cir., 155 F.2d 517. Defendant places strong reliance upon that general principle to defeat jurisdiction of the court; but for reasons presently apparent, it has no application here.
It is essential to the validity of a patent that it be issued upon the application of the one who is the original inventor. A patent issued upon the application of one who is not the original inventor is unauthorized by law, is void, and does not confer any right or title upon the patentee. Atlantic Works v. Brady, 107 U.S. 192, 2 S.Ct. 225, 27 L.Ed. 438; Kennedy v. Hazelton, 128 U.S. 667, 9 S.Ct. 202, 32 L.Ed. 576. And an invalid patent cannot be infringed. M. Swift & Sons v. W. H. Coe Manufacturing Co., 1 Cir., 102 F.2d 391; Cridlebaugh v. Rudolph, 3 Cir., 131 F.2d 795, certiorari denied, 318 U.S. 799, 63 S.Ct. 855, 87 L.Ed. 1147; International Carbonic Engineering Co. v. Natural Carbonic Products, D.C., 57 F.Supp. 248, affirmed, 9 Cir., 158 F.2d 285; Miehle Printing Press 6 Manufacturing Co. v. Publication Corp., 7 Cir., 166 F.2d 615.
In the course of pre-trial conferences and at the beginning of the trial, plaintiff effectively abandoned the allegations of his complaint concerning a confidential relation between the parties, concerning a breach of such relation on the part of defendant in seeking and obtaining the patent, concerning plaintiff’s equitable ownership of the patent and his right to an assignment of it, and concerning the liability of defendant in damages. By statements too plain for misunderstanding, plaintiff made it clear that he merely sought a declaratory judgment of non-infringement of the patent for the reason that defendant was not the original inventor of the brush and therefore the patent could not be infringed, together with injunctive relief restraining defendant from continued injury to the business of plaintiff by assertions of ownership of the patent and its infringement. The allegations not abandoned and remaining in the complaint that the patent issued to defendant was void and not capable of being infringed for the reason that defendant was not the original inventor; that defendant wrongfully asserted infringement on the part of plaintiff; and that wrongful assertion of infringement made to customers and prospective customers of plaintiff had injured and was continuing to injure the business of plaintiff and of W. D. Moore Company with resulting damage, stated a justiciable cause of action arising under the patent laws of the United States for which the court was clothed with jurisdiction to grant appropriate relief under the Declaratory Judgment Act, even though there was a lack of diversity of citizenship. Grip Nut Co. v. Sharp, 7 Cir., 124 F.2d 814; Aralac, Inc. v. Hat Corporation of America, 3 Cir., 166 F.2d 286; Hook v. Hook & Ackerman, 3 Cir., 187 F.2d 52.
The sufficiency of the evidence to support the finding of the trial court that defendant was not the original inventor of the brush is challenged. The grant of letters -patent raised a prima facie presumption that defendant was the inventor of the brush, and the burden rested upon plaintiff to show otherwise by evidence which was clear, strong, and convincing. It would not serve any useful purpose to detail the evidence at .length. It is enough to say that a painstaking review of the record leaves little room for doubt that the evidence adduced upon the trial met in full measure the exacting requirements in a case of this kind.
Certain settlement proceedings are relied upon as constituting a recognition of rights in the defendant to the manufacture and sale of the brush prior and paramount to any rights of plaintiff. Four proposed drafts of an agreement of settlement were prepared by one or the other of the attorneys then representing the parties, respectively, but the authorship or source of each document as distinguished from the others is not entirely clear. Three of the proposed drafts were not executed by either party. The fourth was signed by both of them and it became effective. The attorney who then represented defendant testified that in the negotiations had in connection with the preparation of the several drafts of agreement, the brush was discussed; that it was the understanding that in return for the release of certain claims being asserted by defendant, plaintiff released any interest he had in the brush; and that in the absence of such release on the part of the plaintiff, defendant would not have executed the agreement. The attorney representing plaintiff testified differently. The agreement signed by the parties did not contain any provision recognizing any right of defendant in the manufacture and sale of the brush which was prior and paramount to the right of plaintiff. It did not contain any provision subordinating, releasing, surrendering, or extinguishing any right of plaintiff in the manufacture and sale of the brush. The instrument will be searched in vain for any provision of that kind. The contention that the settlement proceedings constituted a recognition of rights in defendant superior to those of plaintiff relating to the manufacture and sale of the brush finds no support in the record.
Defendant seeks to invoke the doctrine of estoppel. He asserts that previous litigation between the parties estops plaintiff from attacking the validity of the patent. In its answer, defendant pleaded that a certain case was pending in the state court; that it was instituted prior to the filing of this action; and that'precedence in the trial of the two cases should be accorded the state court. But estoppel was not pleaded.* The answer was completely silent in respect to such an issue. Estoppel is an affirmative defense which must be pleaded. And if not pleaded, it is waived. Zeligson v. Hartmen-Blair, Inc., 10 Cir., 135 F.2d 874; Bowles v. Capitol Packing Co., 10 Cir., 143 F.2d 87; Tornello v. Deligiannis Brothers, 7 Cir., 180 F.2d 553.
Other contentions advanced by defendant have been examined, and we think they are without merit.
The judgment is affirmed.
Question: What is the most frequently cited title of the U.S. Code in the headnotes to this case? Answer with a number.
Answer:
|
songer_direct1
|
A
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the ideological directionality of the court of appeals decision, coded as "liberal" or "conservative". Consider liberal to be for government tax claim; for person claiming patent or copyright infringement; for the plaintiff alleging the injury; for economic underdog if one party is clearly an underdog in comparison to the other, neither party is clearly an economic underdog; in cases pitting an individual against a business, the individual is presumed to be the economic underdog unless there is a clear indication in the opinion to the contrary; for debtor or bankrupt; for government or private party raising claim of violation of antitrust laws, or party opposing merger; for the economic underdog in private conflict over securities; for individual claiming a benefit from government; for government in disputes over government contracts and government seizure of property; for government regulation in government regulation of business; for greater protection of the environment or greater consumer protection (even if anti-government); for the injured party in admiralty - personal injury; for economic underdog in admiralty and miscellaneous economic cases. Consider the directionality to be "mixed" if the directionality of the decision was intermediate to the extremes defined above or if the decision was mixed (e.g., the conviction of defendant in a criminal trial was affirmed on one count but reversed on a second count or if the conviction was afirmed but the sentence was reduced). Consider "not ascertained" if the directionality could not be determined or if the outcome could not be classified according to any conventional outcome standards.
Katherine LUMPKIN, Appellant, v. CITY OF LITTLE ROCK, Appellee.
No. 79-1235.
United States Court of Appeals, Eighth Circuit.
Submitted Oct. 9, 1979.
Decided Oct. 17, 1979.
Phillip H. McMath, Little Rock, Ark., and Nat P. Ozmon, Chicago, Ill., on brief, for appellant.
R. Jack Magruder, III, City Atty., Robert T. Taylor, Lester A. McKinley, and Carolyn B. Witherspoon, Asst. City Attys., Little Rock, Ark., William Fleming, Arkansas Municipal League, on brief, for appellee.
Before LAY, HEANEY and HENLEY, Circuit Judges.
PER CURIAM.
Katherine Lumpkin appeals from the District Court’s dismissal of her tort complaint against the City of Little Rock, Arkansas. She contends that the District Court erred in holding that the municipality is immune from suit under Arkansas law. Her complaint in this diversity action states that she was severely burned in 1958 by the City’s negligent placement of “smudge pots” containing hot oil near her home. The City moved to dismiss under Fed.R.Civ.P. 12(b)(6). The District Court issued a memorandum and order dismissing the complaint because, under Arkansas law on the date of the injury, tort actions against cities were barred by the doctrine of municipal immunity. We affirm the District Court’s dismissal on the basis of its memorandum.
Lumpkin also challenges the constitutionality of the Arkansas sovereign immunity doctrine. We find no merit in the challenge.
The order of the District Court is affirmed.
. Plaintiff, who was three years old at the time of her injury, filed her complaint the day before her twenty-first birthday.
. Honorable G. Thomas Eisele, Judge, United States District Court, Eastern District of Arkansas, Western Division.
. The parties agreed that Arkansas law was applicable to the action.
Question: What is the ideological directionality of the court of appeals decision?
A. conservative
B. liberal
C. mixed
D. not ascertained
Answer:
|
songer_usc2
|
15
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What follows is an opinion from a United States Court of Appeals.
The most frequently cited title of the U.S. Code in the headnotes to this case is 29. Your task is to identify the second most frequently cited title of the U.S. Code in the headnotes to this case. Answer "0" if fewer than two U.S. Code titles are cited. To choose the second title, the following rule was used: If two or more titles of USC or USCA are cited, choose the second most frequently cited title, even if there are other sections of the title already coded which are mentioned more frequently. If the title already coded is the only title cited in the headnotes, choose the section of that title which is cited the second greatest number of times.
The AMERICAN PETROLEUM INSTITUTE et al., Petitioners, The Manufacturing Chemists Association and the Chemical Specialties Manufacturers Association, Intervenors, v. OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION et al., Respondents, Industrial Union Department, AFL-CIO, Intervenor.
Nos. 78-1253, 78-1257, 78-1486, 78-1676, 78-1677, 78-1707 and 78-1745.
United States Court of Appeals, Fifth Circuit.
Oct. 5, 1978.
Liskow & Lewis, Gene W. Lafitte, New Orleans, La., Kirkland, Ellis & Rowe, Edward W. Warren, Robert F. Van Voorhees, Arthur F. Sampson, III, Washington, D. C., for petitioners.
Andrew T. A. MacDonald, Washington, D. C., for Manufacturing Chemists Assoc.
Neil J. King, Washington, D. C., for American Iron & Steel Inst.
Robert L. Ackerly, Marilyn L. O’Connell, Washington, D. C., for Chemical Specialties Manufacturers Assoc.
Carin A. Clauss, Sol. of Labor, Nancy L. Southard, Allen H. Feldman, U. S. Dept. of Labor, William S. McLaughlin, Executive Secy., OSHRC, Washington, D. C., for intervenors.
Gene W. Lafitte, New Orleans, La., Edward W. Warren, Robert F. Van Voorhees, Arthur F. Sampson, III, Washington, D. C., for American Petroleum Institute, et al.
Robert P. Stranahan, Jr., Washington, D. C., for American Iron & Steel Institute, etc., et al.
Robert R. Bonczek, John F. Dickey, Wilmington, Del., for E. I. duPont de Nemours & Co.
Harold B. Scoggins, Jr., Gen. Counsel, Independent Petroleum Assoc. of America, Washington, D. C., for Independent Petroleum Institute, et al.
Charles F. Lettow, Lee C. Buchheit, Price O. Gielen, Washington, D. C., for Rubber Manufacturers Assoc., Inc., et al., and Armstrong Rubber Co., and Uniroyal, Inc.
John H. Pickering, Andrew T. A. MacDonald, Neil J. King, Washington, D. C., for Manufacturing Chemists Assoc., American Iron & Steel Institute, et al.
Robert L. Ackerly, Marilyn L. O’Connell, Washington, D. C., for Chemical Specialties Manufacturers Assoc.
Carin A. Clauss, Nancy L. Southard, Benjamin W. Mintz, Assoc. Sol., Sol. of Labor, Dept. of Labor, Washington, D. C., for Department of Labor.
William S. McLaughlin, Executive Secretary, OSHRC, Washington, D. C., for Occupational Safety and Health Adm.
George D. Palmer, III, Associate Regional Solicitor, Dept. of Labor, Birmingham, Ala., Ronald M. Gaswirth, Assoc. Regional Sol., Dept. of Labor, Dallas, Tex., Eula Bingham, Asst. Sec. of Labor, OSHRC, Dept. of Labor, Washington, D. C., for Dept. of Labor.
F. Ray Marshall, Secretary of Labor, U. S. Dept. of Labor, Washington, D. C., for Dept. of Labor.
Griffin B. Bell, Atty. Gen., Dept. of Justice, Washington, D. C., for Dept. of Justice.
Jeremiah Collins, George H. Cohen, Washington, D. C., for Industrial Union Dept. AFL-CIO.
Before COLEMAN, CLARK, and TJO-FLAT, Circuit Judges.
CHARLES CLARK, Circuit Judge:
This case presents consolidated petitions for review of a new health standard limiting occupational exposure to benzene promulgated by the Occupational Safety and Health Administration of the Department of Labor (OSHA), pursuant to the Occupational Safety and Health Act, 29 U.S.C.A. § 651 et seq. (1975) (the Act). The basis for the standard is OSHA’s determination that benzene is a carcinogen for which there is no known safe level of exposure. Briefly, the standard requires employers to assure that no employee is exposed to an airborne concentration of benzene in excess of one part benzene per million parts of air (1 ppm) averaged over an eight-hour day; it requires employers to assure that no employee is exposed to dermal contact with liquid benzene; and it requires employers to assure that caution labels are affixed to all containers of products containing benzene and that the labels remain affixed when the product leaves the employer’s workplace. In addition, the standard imposes numerous compliance requirements for “each place of employment where ben-zené is produced, reacted, released, packaged, repackaged, stored, transported, handled, or used,” with certain exceptions. These requirements include initial and continual exposure monitoring, engineering and work practice controls to reduce and maintain exposure below the permissible level, respiratory protection to prevent excessive exposure in limited situations, protective clothing and equipment to prevent dermal contact with liquid benzene, initial and continual medical surveillance, employee training programs, and retention of records regarding exposure monitoring and medical surveillance.
The petitioning producers and users of benzene and benzene-containing products principally attack the reduction of the permissible exposure limit to 1 ppm, the prohibition of dermal contact with liquids containing benzene, and the labeling requirements for such liquids. The petitioners also attack several of the ancillary provisions of the standard, including its broad scope, the monitoring and medical surveillance' requirements, and the specification of mandatory engineering and work practice controls.
I.
The Act authorizes the Secretary of Labor to promulgate occupational safety and health standards. 29 U.S.C.A. § 655. An “occupational safety and health standard” is defined as “a standard which requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment and places of employment” 29 U.S.C.A. § 652(8). In'promulgating standards dealing with toxic materials, such as benzene, the Secretary is required to
set the standard which most adequately assures, to the extent feasible, on the basis of the best available evidence, that no employee will suffer material impairment of health or functional capacity evpn if such employee has regular exposure to the hazard dealt with by such standard for the period of his working life. Development of standards under this subsection shall be based upon research, demonstrations, experiments, and such other information as may be appropriate. In addition to the attainment of the highest degree of health and safety protection for the employee, other considerations shall be the latest available scientific data in the field, the feasibility of the standards, and experience gained under this and other health and safety laws. Whenever practicable, the standard promulgated shall be expressed in terms of objective criteria and of the performance desired.
29 U.S.C.A. § 655(b)(5). When necessary or appropriate, standards may prescribe labels or other forms of warning, protective equipment, control or technological procedures, exposure monitoring, and medical examinations. 29 U.S.C.A. § 655(b)(7).
Judicial review of occupational safety and health standards is authorized by 29 U.S.C.A. § 655(f), and on review “[t]he determinations of the Secretary shall be conclusive if supported by substantial evidence in the record considered as a whole.” Several courts, including this one, have pointed out the problems involved in attempting to apply the traditional substantial evidence test in assessing OSHA standards resulting from informal rulemaking. E. g., Associated Industries of New York State, Inc. v. United States Department of Labor, 487 F.2d 342, 347-50 (2d Cir. 1973); Florida Peach Growers Association, Inc. v. United States Department of Labor, 489 F.2d 120, 127-29 (5th Cir. 1974); Industrial Union Department, AFL-CIO v. Hodgson, 162 U.S.App.D.C. 331, 336-340, 499 F.2d 467, 472-76 (1974); Synthetic Organic Chemical Manufacturers Association v. Brennan, 503 F.2d 1155, 1158-60 (3d Cir. 1974). The problem centers not on how to apply the test to factual findings subject to evidentiary development, but rather on how to review legislative-like policy judgments. With respect to the former, the substantial evidence standard provided in the statute clearly is applicable. See, e. g., Industrial Union Department, AFL-CIO v. Hodgson, supra, 499 F.2d at 474; American Iron & Steel Institute, et al. v. OSHA, 577 F.2d 825, No. 76-2358 et al. (3d Cir., filed March 28, 1978). Policy choices, though not so susceptible to verification or refutation by the record, must be scrutinized nevertheless. See Associated Industries of New York, Inc. v. United States Department of Labor, supra, 487 F.2d at 348. Although the courts have differed in their articulation of the standard of review of these policy judgments, they have required the Secretary’s action to be consistent with the statutory language and purpose. Synthetic Organic Chemical Manufacturers Association v. Brennan, supra, 503 F.2d at 1159. As this court stated in assessing an emergency temporary standard in Florida Peach Growers, “it seems clear that even with the required substantial evidence test, our review basically must determine whether the Secretary carried out his essentially legislative task in a manner reasonable under the state of the record before him.” 489 F.2d at 129. This includes, of course, a review of whether the Secretary exercised his decisionmaking power within the limits imposed by Congress.
II.
Benzene is a ubiquitous hydrocarbon compound (CeHe) that is manufactured for a wide variety of industrial uses. The petrochemical and petroleum refining industries are responsible for 94 percent of the total domestic production of benzene, and the steel industry produces the remaining 6 percent primarily as a by-product of the coking process. The primary use of benzene is as a feedstock in the manufacture of other organic chemicals; it is also used in the manufacture of detergents, pesticides, solvents, and paint, and as a solvent and reactant in chemical laboratories. Industries currently using benzene include the chemical, printing, lithograph, rubber cements, rubber fabricating, paint, varnish, stain removers, adhesives, and petroleum industries. Among the products that contain benzene are motor fuels such as gasoline, which contain up to 2 percent benzene.
Benzene has been recognized since 1900 as a toxic substance capable of producing acute and chronic nonmalignant effects in humans. When benzene vapors are inhaled, the benzene diffuses rapidly through the lungs and is quickly absorbed into the blood. Acute circulatory failure resulting in death within minutes often accompanies exposure to benzene concentrations as high as 20,000 ppm. Other acute effects of exposure to milder, though still high (250-500 ppm), concentrations of benzene include vertigo, nervous excitation, headache, nausea, and breathlessness. When exposure is stopped, rapid recovery from these symptoms usually occurs.
The most common nonmalignant effects of chronic exposure to low benzene concentration levels are a non-functioning bone marrow and deficiencies in the formed elements of the blood. The degree of severity of such disorders ranges from mild and transient episodes to severe and fatal effects. Chromosomal aberrations have also been associated with chronic benzene exposure, and dermatitis or other dermal infections can be caused by direct bodily contact with liquid benzene.
As a result of its toxicity, benzene’s history has been one of regulation. In 1946, the American Conference of Governmental Industrial Hygienists recommended a threshold limit value for benzene exposure of 100 ppm. This value was reduced to 50 ppm in 1947, to 35 ppm in 1948, to 25 ppm in 1963, and to 10 ppm in 1974. The American National Standards Institute adopted a threshold limit value of 10 ppm in 1969, which OSHA adopted in 1971 without rule-making under the authority of 29 U.S.C.A. § 655(a). This standard, codified at 29 C.F.R. § 1910.1000 Table Z-2 (1977) and still in effect, was based on the nonmalignant toxic effects of benzene exposure and not on any possible leukemia hazard.
Widely scattered through the benzene literature are studies suggesting a link between benzene exposure and leukemia, a usually fatal cancer of the blood-forming organs. During the 1970’s several additional studies reported a statistically significant increased risk of leukemia among workers occupationally exposed to high levels of benzene and concluded benzene was a leuk-emogen. As a result of this new evidence, OSHA began procedures which culminated with the present proposal, among other things, to reduce the permissible exposure level from 10 ppm to 1 ppm.
In January 1977 OSHA issued voluntary Guidelines for Control of Occupational Exposure to Benzene recommending exposure not to exceed an eight-hour time-weighted average of 1 ppm. An Emergency Temporary Standard for Occupational Exposure to Benzene also providing for a reduction in the permissible exposure limit to 1 ppm was issued in May 1977, but this standard never went into effect because of judicial challenges. The proposed permanent benzene standard, which was based on OSHA’s determination that the available scientific evidence established that employee .exposure to benzene presents a leukemia hazard and that exposure therefore should be limited to the lowest feasible level, was published on May 27,1977. This proposal provided for a reduction in the permissible exposure limit from 10 ppm to 1 ppm and established requirements relating to dermal and eye contact, exposure monitoring, medical surveillance, methods of compliance, labeling, and recordkeeping. Public hearings were held July 19 through August 10, 1977, at which 95 witnesses testified. In addition, numerous exhibits and documents were submitted to OSHA as part of the rulemak-ing record. The resulting permanent benzene standard was promulgated on February 3 and published on February 10, 1978, with a March 13, 1978 effective date.
III.
The American Petroleum Institute on behalf of itself and member companies filed petitions for review of the standard in this court on February 2 and February 3, 1978. The American Iron and Steel Institute, the Independent Petroleum Association of America, the Manufacturing Chemists Association, the Rubber Manufacturers Association, the Armstrong Rubber Company and Uniroyal, Inc., E. I. Du Pont de Nem-ours and Company, and the Chemical Specialties Manufacturers Association subsequently either intervened on behalf of the American Petroleum Institute or filed original petitions for review in other circuits that were transferred to this circuit and consolidated with the American Petroleum Institute case. In addition, the Industrial Union Department, AFL-CIO, intervened on behalf of OSHA in support of the standard.
The petitioners filed motions for a stay of the standard pending review on March 10, 1978, and on March 13 a judge of this court issued a temporary stay of the standard pending a hearing before a three-judge panel. The issues concerning the stay were fully briefed by the parties on an expedited basis, and after hearing oral argument a panel of the court on April 18,1978, ordered a stay of the standard to be continued pending disposition of the petitions for review.
The principal argument of the petitioning producers of benzene and benzene-containing products is that substantial evidence and the best available evidence do not show that the reduction of the permissible exposure limit from 10 ppm to 1 ppm is reasonably necessary or appropriate to provide safe or healthful employment and places of employment. These petitioners also attack several of the ancillary provisions of the standard, including its broad scope, the monitoring and medical surveillance requirements, and the specification of mandatory primary means of compliance, as not being supported by substantial evidence that they are reasonably necessary or appropriate to provide safe or healthful employment. The attack of the petitioning users of benzene and benzene-containing products is two-fold: (i) They contend that substantial evidence and the best available evidence do not show that the dermal contact prohibition is reasonably necessary or appropriate to provide safe or healthful employment, and that the dermal contact prohibition is not feasible; and (ii) they contend that substantial evidence does not show the labeling requirement to be reasonably necessary or appropriate to provide safe or healthful employment, that the labeling requirement is not feasible, and that the labeling requirement is beyond OSHA’s jurisdiction. OSHA, in addition to arguing that substantial evidence, the best available evidence, feasibility considerations, and its statutory mandate to protect workers justify the standard in its entirety, contends that Congress imposed on it no substantive requirement to promulgate only standards that are reasonably necessary or appropriate to provide safe or healthful employment and places of employment.
On June 21, 1978, the day before oral argument, OSHA promulgated an amended standard to exempt from the scope of the benzene standard work operations where the only exposure to benzene is from liquid mixtures containing 0.5 percent (0.1 percent after June 28, 1981) or less of benzene by volume, and to exempt from the labeling requirements liquid mixtures containing 5.0 percent or less benzene by volume which were packaged before June 27, 1978. 43 Fed.Reg. 27,971 (1978). Although the proposed emergency temporary standard and the proposed permanent standard had exempted work operations where exposure to benzene resulted only from liquid mixtures containing 1 percent or less of benzene by volume, the permanent standard that was promulgated contained no such exemption. As a result, the permanent standard prohibited all dermal contact with liquids containing any amount of benzene and it imposed the labeling requirements on all such liquids. Several industry groups petitioned OSHA for a stay of the dermal contact prohibition and labeling requirements as they applied to liquids containing small amounts of benzene. OSHA subsequently granted a stay as to work operations where the sole exposure to benzene was from mixtures containing 0.1 percent or less of benzene and instituted a new rulemaking proceeding which resulted in the June 21, 1978 amendment.
The court called for supplemental briefing to address the effect of this amendment on the issues already briefed and argued. This briefing has been completed, and it appears that the major effect of the amendment is on the arguments regarding the feasibility of the dermal contact and labeling provisions. Since the considerations associated with the feasibility of those provisions have been significantly changed by the amendments, we do not address the merits of the feasibility arguments in this opinion.
IV.
OSHA justifies the reduction of the permissible exposure limit for benzene from 10 ppm to 1 ppm by coupling two factual findings, which it contends are supported by substantial evidence in the record, with a regulatory policy which OSHA contends is required by its mandate to protect workers. The factual findings, are that benzene causes leukemia and that there presently exists no known safe level for benzene exposure. The regulatory policy is to limit employee exposure to carcinogens to the lowest feasible level.
The producer petitioners, in addition to attacking the factual finding that no known safe level for benzene exposure exists, contend that OSHA has failed to meet a burden which the Act imposes of determining that the reduction of the permissible exposure limit from 10 ppm to 1 ppm is “reasonably necessary” to provide a safe workplace. In support of the latter contention, these petitioners point to this circuit’s recent decision in Aqua Slide ‘N’ Dive Corp. v. Consumer Product Safety Commission, 569 F.2d 831 (5th Cir. 1978), and assert that OSHA failed to assess benefits expected to be achieved by the standard in light of the expected costs of compliance. The petitioners argue that by defining an “occupational safety and health standard” as one requiring conditions “reasonably necessary” to provide safe or healthful places of employment, 29 U.S.C.A. § 652(8), Congress recognized that safety and health resources are not unlimited and required OSHA somewhere in its decisionmaking process to (1) attempt to determine the extent to which its standards will benefit workers, and (2) decide whether the projected benefits justify the costs of compliance with the standard. Only if all standards are subjected to such assessment, argue the petitioners, can OSHA assure maximum benefit from the finite amount industry can expend on safety and health and thus carry out Congress’ overriding policy “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions.” 29 U.S.C.A. § 651(b). Since OSHA has not made a valid determination that reducing the permissible exposure level of benzene from 10 ppm to 1 ppm is reasonably necessary to protect workers from a risk of leukemia, the producers ask us to set that part of the standard aside.
OSHA denies that the “reasonably necessary” language imposes any substantive obligation on it in promulgating standards. OSHA would distinguish Aqua Slide, which dealt with the Consumer Product Safety Act, on the basis that the “reasonably necessary” language in that Act appeared as a part of the sections which dealt with the agency’s process of setting standards, 15 U.S.C.A. §§ 2056(a), 2058(c)(2)(A), whereas the “reasonably necessary” counterpart in the act it administers appears only in the section which defines the type of standard it may promulgate.
In authorizing the Consumer Product Safety Commission to promulgate safety standards, Congress provided that “[a]ny requirement of such a standard shall be reasonably necessary to prevent or reduce an unreasonable risk of injury associated with such product.” 15 U.S.C.A. § 2056(a). It also required the Consumer Product Safety Commission to make a specific finding that its rules were “reasonably necessary to eliminate or reduce an unreasonable risk of injury.” 15 U.S.C.A. § 2058(c)(2)(A). Rather than following this format, the Occupational Safety and Health Act defines the occupational safety and health standard it authorizes as one “which requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment and places of employment.” 29 U.S.C.A. § 652(8). We decline to construe the precisely similar requirements of these two Acts differently or to read words out of the OSHA legislation. The Act imposes on OSHA the obligation to enact only standards that are reasonably necessary or appropriate to provide safe or healthful workplaces. If a standard does not fit in this definition, it is not one that OSHA is authorized to enact.
OSHA next argues that even if the conditions required by occupational safety and health standards must be reasonably necessary to provide safe or healthful places of employment, the Act still imposes on OSHA no obligation to undertake a cost-benefit analysis with respect to the standards it promulgates. OSHA argues that 29 U.S.C.A. § 655(b)(5) defines when conditions imposed by a standard dealing with toxic materials are reasonably necessary. It urges that the emphasis of that section on making of a standard “which most adequately assures . . . that no employee will suffer material impairment of health . [from] regular exposure . for the period of his working life,” overcomes any requirement to make a cost-benefit analysis. Nevertheless, OSHA contends that it did undertake economic analyses of both costs and benefits associated with the standard as required by Aqua Slide, and that after assessing those analyses it promulgated the standard.
Although 29 U.S.C.A. § 655(b)(5) requires the goal of attaining the highest degree of health and safety protection for the employee, it does not give OSHA the unbridled discretion to adopt standards designed to create absolutely risk-free workplaces regardless of cost. To the contrary, that section requires standards to be feasible, and it contains a number of pragmatic limitations in the form of specific kinds of information OSHA must consider in enacting standards dealing with toxic materials. Those include “the best available evidence,” “research, demonstrations, experiments, and such other information as may be appropriate,” “the latest available scientific data in the field,” and “experience gained under this and other health and safety laws.” Moreover, in standards dealing with toxic materials, just as with all other occupational safety and health standards, the conditions and other requirements imposed by the standard must be “reasonably necessary or appropriate to provide safe or healthful employment and places of employment.” 29 U.S.C.A. § 652(8).
Since the purpose of the Act to protect workers from dangerous conditions of employment is parallel to the purpose of the Consumer Product Safety Act to protect consumers from dangerous products, we must be guided by 4qua Slide in determining whether OSHA has met its burden of showing that the benzene standard is reasonably necessary to protect workers from a leukemia hazard. There we said:
In evaluating the “reasonable necessity” for a standard, the Commission has a duty to take a hard look, not only at the nature and severity of the risk, but also at the potential the standard has for reducing the severity or frequency of the injury, and the effect the standard would have oh the utility, cost or availability of the product.
569 F.2d at 844; see also D. D. Bean & Sons v. Consumer Product Safety Commission, 574 F.2d 643 (1st Cir. 1978). Before it regulates, the agency must show that a hazard' exists and that its regulation will reduce the risk from the hazard, for “no [occupational safety and health] standard would be expected to impose added costs or inconvenience . . . unless there is reasonable assurance that the frequency or severity of injuries or illnesses will be reduced.” 569 F.2d at 839. More importantly for today’s case, Aqua Slide also requires the agency to assess the expected benefits in light of the burdens to be imposed by the standard. Although the agency does not have to conduct an elaborate cost-benefit analysis, 569 F.2d at 840, it does have to determine whether the benefits expected from the standard bear a reasonable relationship to the costs imposed by the standard. 569 F.2d at 842.
The only way to tell whether the relationship between the benefits and costs of the benzene standard is reasonable is to estimate the extent of'the expected benefits and costs. See 569 F.2d at 843. OSHA did this with respect to costs by engaging a consulting firm to assess the expected compliance costs and economic feasibility of the proposed standard. 43 Fed.Reg. 5934-39. Based on this study and other evidence, OSHA estimated compliance costs for all affected industries to be $187-205 million first year operating costs, $266 million engineering control costs, and $34 million recurring annual costs. OSHA determined these costs to be feasible since they would not threaten the financial welfare of the affected firms or the general economy. However, OSHA disclaimed any obligation to balance these costs against expected benefits. 43 Fed.Reg. 5940-41. Rather than attempting to measure the extent to which the leukemia hazard of benzene exposure would be reduced by lowering the permissible exposure limit from 10 ppm to 1 ppm, OSHA merely assumed that benefits from the reduction “may be appreciable.” It based this assumption on a finding that benzene was unsafe at any level and its conclusion that exposures to lower levels of toxic materials would be safer than exposure to higher levels.
OSHA’s fail-back position attempts to justify its standard as being reasonably necessary within the meaning of Aqua Slide. It contends the standard promises appreciable benefits at a cost which industry can absorb. This justification is deficient in one crucial way: substantial evidence does not support OSHA’s conclusion that benefits are likely to be appreciable. Without an estimate of benefits supported by substantial evidence, OSHA is unable to justify a finding that the benefits to be realized from the standard bear a reasonable relationship to its one-half billion dollar price tag.
OSHA’s assumption that the standard is likely to result in benefits is- not unsupported. The divided opinion in the scientific community over the existence or not of safe threshold levels of exposure to carcinogens provides substantial evidence which would support the finding that exposure to benzene at the present level of 10 ppm poses some leukemia risk. The general agreement in the scientific community that exposure to carcinogens at low levels is safer than exposure at higher levels permits the further factual deduction that reducing the permissible exposure limit from 10 ppm to 1 ppm will result in some benefit. This finding and deduction, however, does not yield the conclusion that measurable benefits will result, and OSHA is unable to point to any studies or projections supporting such a finding. As we noted in Aqua Slide, mere rationality is not equivalent to substantial evidence that conditions required by standards are reasonably necessary. 569 F.2d at 841. The lack of substantial evidence of discernable benefits is highlighted when one considers that OSHA is unable to point to any empirical evidence documenting a leukemia risk at 10 ppm even though that has been the permissible exposure limit since 1971. OSHA’s assertion that benefits from reducing the permissible exposure limit from 10 ppm to 1 ppm are likely to be appreciable, an assumption based only on inferences drawn from studies involving much higher exposure levels rather than on studies involving these levels or sound statistical projections from the high-level studies, does not satisfy the reasonably necessary requirement limiting OSHA’s action. Aqua Slide requires OSHA to estimate the extent of expected benefits in order to determine whether those benefits bear a reasonable relationship to the standard’s demonstrably high costs.
We are not persuaded by OSHA’s argument that this standard should be upheld since the lack of knowledge concerning the effects of exposure to benzene at low levels makes an estimate of benefits expected from reducing the permissible exposure level impossible. The statute requires all conditions imposed by a standard to be reasonably necessary to provide safe or healthful employment, and it requires decisions to be based on “the best available evidence,” “research, demonstrations, experiments, and such other information as may be appropriate,” “the latest scientific data in the field,” and “experience gained under this and other health and safety laws.” By requiring the consideration of such kinds of /information, Congress provided that OSHA ¡regulate on the basis of knowledge rather I than on the unknown. But see Society of Plastics Industry, Inc. v. OSHA, 509 F.2d 1801, 1308 (2d Cir. 1975). Until OSHA can provide substantial evidence that the benefits to be achieved by reducing the permissible exposure limit from 10 ppm to 1 ppm bear a reasonable relationship to the costs imposed by the reduction, it cannot show that the standard is reasonably necessary to provide safe or healthful workplaces.
This does not mean that OSHA must wait until deaths occur as a result of exposure at levels below 10 ppm before it may validly promulgate a standard reducing the permissible exposure limit. See Florida Peach Growers Association, Inc. v. United States Department of Labor, 489 F.2d 120, 132 (5th Cir. 1974). Nevertheless, OSHA must have some factual basis for an estimate of expected benefits before it can determine that a one-half billion dollar standard is reasonably necessary. For example, when studies of the effects of human exposure to benzene at higher concentration levels in the past are sufficient to enable a dose-response curve to be charted that can reasonably be projected to the lower exposure levels, or when studies of the effects of animal exposure to benzene are sufficient to make projections of the risks involved with exposure at low levels, then OSHA will be able to make rough but educated estimates of the extent of benefits expected from reducing the permissible exposure level from 10 ppm to 1 ppm. Until such estimates are possible, OSHA does not have sufficient information to determine that a standard such as the one under review which it can only say might protect some worker from a leukemia risk is reasonably necessary.
We will not attempt to reconcile our decision with the cases from other circuits which uphold other standards regulating exposure to carcinogens. See Industrial Union Department, AFL-CIO v. Hodgson, 162 U.S.App.D.C. 331, 499 F.2d 467 (1974) (asbestos dust standard); Society of Plastics Industry, Inc. v. OSHA, 509 F.2d 1301 (2d Cir. 1975) (vinyl chloride standard); American Iron & Steel Institute et al. v. OSHA, 577 F.2d 825, No. 76-2358 et al. (3d Cir., filed March 28, 1978) (coke oven emission standard). Those opinions did not address what Congress meant by requiring the conditions imposed by standards to be reasonably necessary to provide safe or healthful places of employment. In this circuit, under our Agua Slide decision, substantial evidence must support a finding that those conditions are reasonably necessary, a showing that OSHA has not made. In addition, those cases were decided on their own records. Without critical analysis of what was established in those proceedings, we hold in today’s case that Congress intended for OSHA to regulate on the basis of more knowledge and fewer assumptions than this record reflects.
OSHA’s failure to provide an estimate of expected benefits for reducing the permissi-f ble exposure limit, supported by substantial '■ evidence, makes it impossible to assess the reasonableness of the relationship between expected costs and benefits. This failure means that the required support is lacking to show reasonable necessity for the standard promulgated. Consequently, the reduction of the permissible exposure limit from 10 ppm to 1 ppm and all other parts of the standard geared to the 1 ppm level must be set aside.
V.
OSHA’s prohibition of dermal contact with benzene is based on “OSHA’s policy that, in dealing with a carcinogen, all potential routes of exposure (i. e., inhalation, ingestion, and skin absorption) be limited to the extent feasible.” 43 Fed.Reg. 5948. OSHA, while acknowledging that the record evidence on the effect of benzene on the skin is “extremely limited” and that the few studies in the area “are not definitive as to the extent of benzene that is absorbed through the intact skin or as to the comparative rate of absorption through damaged skin,” 43 Fed.Reg. 5948-49, nevertheless decided to prohibit dermal contact with liquids containing benzene. In arriving at this decision OSHA relied on animal studies and one human study suggesting that benzene is absorbed through intact skin, on the assumption that benzene would more readily be absorbed through damaged skin than undamaged skin, and on the belief that substances containing benzene are readily absorbed through the skin and act as vehicles for absorption of benzene.
OSHA now seeks in part to justify this prohibition as an adjunct to the permissible exposure limit for airborne concentrations of benzene and because of a concern for dermatitis. To the extent that the dermal contact prohibition is an adjunct of the permissible exposure limit, it would have to be set aside along with the permissible exposure limit. The concern for dermatitis, on the other hand, appears to be a post hoc rationalization for the dermal contact prohibition since it was not a significant part of OSHA’s reasoning process that led to this provision. The requirements of this standard were based on the possible leukemia hazard associated with exposure to benzene, 43 Fed.Reg. 5918, 5948, and our review must be of the reasoning process of the agency at the time it promulgated the standard based on the record before it. Dry Color Manufacturers’ Association, Inc. v. Department of Labor, 486 F.2d 98, 104 n.8 (3d Cir. 1973).
The user petitioners contend that substantial evidence and the best available evidence do not support a finding that the dermal contact provisions are reasonably necessary to provide safe or healthful employment, and in addition they contend that the dermal contact prohibition is not feasible since it is impossible for certain industries to operate without some dermal contact with liquids containing small amounts of benzene. Since the amendment to the standard on June 21, 1978, significantly affects the feasibility issue, we will not address that issue in this opinion. We agree with the users, however, that OSHA has not shown the dermal contact prohibition to be reasonably necessary to protect workers from contracting benzene-related leukemia since readily available evidence of the kind Congress required OSHA to consider was neglected. The record therefore fails to support the finding that benzene is absorbed through the skin. Since entry to the body by dermal contact was not established, the record will not support a finding that the prohibition of all dermal
Question: The most frequently cited title of the U.S. Code in the headnotes to this case is 29. What is the second most frequently cited title of this U.S. Code in the headnotes to this case? Answer with a number.
Answer:
|
songer_genresp2
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the second listed respondent. If there are more than two respondents and at least one of the additional respondents has a different general category from the first respondent, then consider the first respondent with a different general category to be the second respondent.
Warren WEIL and Maria Galuppo, Plaintiffs-Appellees, Cross-Appellants, v. RETIREMENT PLAN ADMINISTRATIVE COMMITTEE of the TERSON CO., INC., the Terson Co., Inc., the Northern Trust Co., as Trustees of the Terson Co., Inc. Salaried Retirement Plan, Defendants-Appellants, Cross-Appellees.
Nos. 1126, 1239, Dockets 89-9223, 89-9255.
United States Court of Appeals, Second Circuit.
May 1, 1991.
Ellen S. Mendelson (Sidney Eagle, Mitchell Shenkman, Eagle & Fein, P.C., New York City, of counsel), for plaintiffs-appel-lees, cross-appellants.
Logan T. Johnston, Phoenix, Ariz. (Johnston, Maynard, Grant & Parker, Phoenix, Ariz., Richard W. Cutler, New York City, of counsel), for defendants-appellants, cross-appellees.
Shirley D. Peterson, Asst. Atty. Gen. (Gary R. Allen, Richard Farber, Bruce R. Ellisen, Attorneys, Tax Div., Dept, of Justice, Washington, D.C., Otto G. Obermaier, U.S. Atty., S.D.N.Y., New York City, of counsel), for U.S. as amicus curiae.
Before MESKILL, CARDAMONE and PIERCE, Circuit Judges.
ON PETITION FOR REHEARING
PIERCE, Senior Circuit Judge:
We grant the petition for rehearing of plaintiffs Warren Weil and Maria Galuppo. In our prior opinion, 913 F.2d 1045 (2d Cir.1990) (“Weil II”), familiarity with which is assumed, we reversed the district court’s judgment that a partial termination of the Retirement Plan for Salaried Employees of The Terson Company, Inc. (“Plan”) had occurred under 26 U.S.C. § 411(d)(3) when 33.4% of the Plan participants were discharged from their jobs in 1981. We held that in determining whether a partial termination had occurred, the district court should have focused only on the terminated plan participants whose benefits had not vested and that the ratio of terminated non-vested participants over total plan participants yielded a percentage, 16.4%, which did not qualify as a significant percentage on the facts presented.
After plaintiffs filed a petition for rehearing, we invited the Internal Revenue Service (“IRS”), the agency responsible for administering the partial termination statute, to submit a brief as amicus curiae and requested that defendants respond. The IRS has informed us that it believes a partial termination may occur if there is “a significant contraction of a plan, such as a significant reduction in the number of plan participants” and “all terminated participants, both vested and non-vested, should be counted in determining whether a partial termination has occurred.” Brief for Amicus at 6. The IRS thus measures partial terminations using the ratio of terminated plan participants (vested and non-vested) over total plan participants. Furthermore, the IRS states that it has used this ratio in previous revenue rulings and that its long-standing position is expressly set forth in its Plan Termination Handbook contained in the Internal Revenue Manual, Ch. 252(7) (Apr. 20, 1990), reprinted in 4 Administration Internal Revenue Manual (CCH) at 21.151. Id. at 8-9. Because serious questions as to the correctness of our holding have been raised, we believe it is necessary to reconsider how partial terminations should be measured.
When a court interprets a statute that has been construed by the administering agency, it must first ask:
whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984) (footnotes omitted); accord Mead Corp. v. Tilley, 490 U.S. 714, 722, 109 S.Ct. 2156, 2161-62, 104 L.Ed.2d 796 (1989). Moreover, “ ‘[t]o uphold [the agency’s interpretation] “we need not find that [its] construction is the only reasonable one, or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings.” ... We need only conclude that it is a reasonable interpretation of the relevant provisions.’ ” Aluminum Co. of Am. v. Central Lincoln Peoples’ Util. Dist., 467 U.S. 380, 389, 104 S.Ct. 2472, 2479, 81 L.Ed.2d 301 (1984) (emphasis in original) (quoting American Paper Inst., Inc. v. American Elec. Power Serv. Corp., 461 U.S. 402, 422-23, 103 S.Ct. 1921, 1932-33, 76 L.Ed.2d 22 (1983) (quoting Unemployment Compensation Comm’n v. Aragon, 329 U.S. 143, 153, 67 S.Ct. 245, 250, 91 L.Ed. 136 (1946))); see Chevron, 467 U.S. at 843 n. 11, 104 S.Ct. at 2782 n. 11; see also Blum v. Bacon, 457 U.S. 132, 141, 102 S.Ct. 2355, 2361, 72 L.Ed.2d 728 (1982) (interpretation of agency that administers statute is entitled to substantial deference).
The original provision governing terminations, 26 U.S.C. § 401(a)(7), was added to the Internal Revenue Code as part of the Self-Employed Individuals Tax Retirement Act of 1962, Pub.L. No. 792, § 2(2), 76 Stat. 809 (1962). As enacted in 1962, § 401(a)(7) provided in pertinent part:
A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that, upon its termination or upon complete discontinuance of contributions under the plan, the rights of all employees to benefits accrued to the date of such termination or discontinuance, to the extent then funded, or the amounts credited to the employees’ accounts are nonfor-feitable.
In its report on § 401(a)(7), the Committee on Ways and Means stated: “This new provision adds to the statute a requirement which has been in the Treasury regulations for many years.... [T]he bill precludes the possibility that contributions for employees which have been deducted for income-tax purposes may revert back to the employer.... This requirement should serve to prevent abuses resulting from termination of plans.” H.R.Rep. No. 378, 87th Cong., 1st Sess., reprinted in 1962-3 C.B. 261, 269. Presumably, intending to achieve this goal on a much broader basis, Congress made § 401(a)(7) applicable to all retirement plans, including plans provided by corporations, not merely to those that covered owner-employees. Id. at 275-76; S.Rep. No. 992, 87th Cong., 1st Sess., reprinted in 1962-3 C.B. 303, 328.
When Congress enacted § 401(a)(7) in 1962, it apparently did not contemplate the concept of partial termination. Then in 1963, in a treasury regulation, the Secretary of the Treasury explicitly introduced the concept of partial termination by defining termination as used in § 401(a)(7) to include “both a partial termination and a complete termination of a plan.” Tres.Reg. § 1.401-6(b)(2) (1963). Thereafter, § 401(a)(7) governed partial terminations.
Eleven years later, as part of the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461 (1988), Congress enacted 26 U.S.C. § 411(d)(3), which explicitly refers to partial termination, merely to restate then-existing § 401(a)(7) and to codify the definition of termination in Treasury Regulation § 1.401-6(b)(2). Anderson v. Emergency Medicine Assocs., 860 F.2d 987, 991 (10th Cir.1988). The legislative history of § 411(d)(3) states: “[T]he rule of full immediate vesting is still to apply in the case of a termination, or partial termination of a plan.” H.R.Conf.Rep. No. 1280, 93rd Cong., 2d Sess., reprinted in 1974 U.S. Code Cong. & Admin.News 5038, 5058; see S.Rep. No. 383, 93rd Cong., 2d Sess., 1974 U.S.Code Cong. & Admin.News 4890, 4935.
Section 411(d)(3), which is the subject of our particular concern herein, provides in relevant part:
a trust shall not constitute a qualified trust under section 401(a) unless the plan of which such trust is a part provides that—
(A) upon its termination or partial termination,
the rights of all affected employees to benefits accrued to the date of such termination, partial termination, or discontinuance, to the extent funded as of such date, or the amounts credited to the employees’ accounts, are nonforfeitable.
Although Congress did not provide a definition of partial termination, the House and Senate Reports state that “[e]xamples of a partial termination might include, under certain circumstances, a large reduction in the work force, or a sizeable reduction in benefits under the plan.” H.R.Rep. No. 807, 93rd Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News 4670, 4731; S.Rep. No. 383, 93rd Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News 4890, 4935. In addition, the corresponding Treasury Regulation provides in part:
Whether or not a partial termination of a qualified plan occurs (and the time of such event) shall be determined by the Commissioner with regard to all the facts and circumstances in a particular case. Such facts and circumstances include: the exclusion, by reason of a plan amendment or severance by the employer, of a group of employees who have previously been covered by the plan; and plan amendments which adversely affect the rights of employees to vest in benefits under the plan.
Treas.Reg. § 1.411(d)-2(b)(l) (1977).
In Weil II, we speculated that the primary congressional purpose of the partial termination statute was to protect the pension benefits of non-vested participants. 913 F.2d at 1050-51. It seemed logical to the district court and to us to consider only non-vested participants in a partial termination inquiry, since it was their rights to accrued benefits that were imperiled.
After further reflection upon the legislative history of the partial termination provisions, we are persuaded that the legislative intent behind § 411(d)(3) is ambiguous, and it is equally arguable that in enacting this section, Congress mainly intended to prevent employers from abusing pension plans to reap tax benefits. For example, the Third Circuit, in at least one case, has concluded that “[§ 411(d)(3)] is intended to prevent employers from maintaining pension plans for the purpose of deferring income, and thereby reducing their taxes, rather than for the purpose of providing retirement benefits for employees.” Bruch v. Firestone Tire & Rubber Co., 828 F.2d 134, 151 (3d Cir.1987), aff'd in part and rev’d in part on other grounds, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). In reaching that conclusion, the court reasoned that Congress pursued the goal of protecting employees from dismissals motivated by an employer’s desire to avoid paying pension benefits in other sections of ERISA and that “[ajttributing this goal to the partial termination provisions as well makes the partial termination provision seem both superfluous and clumsy.” Id. The Third Circuit’s analysis of the purpose of the partial termination provisions, however, has varied. See Chait v. Bernstein, 835 F.2d 1017, 1021 (3d Cir. 1987) (§ 411(d)(3) “defines termination for the purpose of vesting certain unvested employee benefits for workers who would otherwise be left out in the cold after a drastic and sudden change in the plan”); Vornado, Inc. v. Trustees of the Retail Store Employees’ Union Local 1262, 829 F.2d 416, 418 n. 2 (3d Cir.1987) (“The statute’s aim is to force employers to include language favorable to employees in the plan.”); United Steelworkers v. Harris & Sons Steel Co., 706 F.2d 1289, 1298 (3d Cir.1983) (discussing partial termination in terms of conditioning tax benefits upon employers’ compliance with rules designed to benefit employees; “[r]ules governing the effect of a ‘partial termination’ in the tax sense serve the purpose of helping to ensure that employees will not be deprived of their anticipated benefits”).
Based upon the conflicting interpretations by our sister circuit and upon our own reassessment as well, it appears to us that the legislative purpose behind § 411(d)(3) is far from clear. See Vornado, 829 F.2d at 418 n. 2 (“the purpose underlying § 411(d)(3) is not altogether obvious”); Bruch, 828 F.2d at 151 (“[I]t is not easy to divine the purpose of § 411(d)(3). Without a clear sense of the provision's purpose it is difficult to decide what should and should not constitute a partial termination. Clarification from Congress or the Internal Revenue Service as to the purpose of this provision would make it substantially easier to enforce.”). Finally, we recognize that the statute itself is entirely silent regarding how a partial termination is to be measured.
Having concluded that the congressional purpose behind the partial termination statute is unclear and that the statute is silent regarding the measurement of a partial termination, we next consider whether the IRS’ position is based on a permissible construction of § 411(d)(3). In our view, the IRS’ interpretation of § 411(d)(3) — that a partial termination occurs when there is a significant contraction of the plan, and therefore, all terminated plan participants must be considered in a partial termination inquiry — is a reasonable construction in light of the examples provided in the House and Senate Reports (“a large reduction in the work force, or a sizeable reduction in benefits under the plan”). Those examples suggest that Congress regarded a partial termination to be a sudden and dramatic change in the plan as a whole. Moreover, the language used in the treasury regulations, which refers to the exclusion of employees who have been covered by a plan, additionally supports the IRS’ position. We also find significance in the fact that no distinction was made between vested and non-vested plan participants in these sources. We therefore apply the ratio utilized by the IRS and, as the district court found, conclude that the Plan was partially terminated in 1981 when 33.4% of the Plan participants were discharged. Accordingly, we reinstate the district court’s order that defendants purchase annuities sufficient to provide benefits to plaintiffs equivalent to the actuarial present value of their benefits and its award of attorneys’ fees, costs and disbursements under 29 U.S.C. § 1132(g)(1) (1988), plus post-judgment interest.
In their answer to the petition for rehearing, defendants urge that the IRS is establishing a new rule that should be applied only prospectively. They argue that since they detrimentally relied on a 1981 determination letter — in which the IRS considered only non-vested participants in concluding that no partial termination had occurred during the years 1975-1980 — the IRS’ retroactive application of its “all-terminee analysis” would be an abuse of discretion. Even if the IRS has established a new rule, we are constrained to reject defendants’ argument by Dickman v. Commissioner, 465 U.S. 330, 104 S.Ct. 1086, 79 L.Ed.2d 343 (1984). There, plaintiffs argued that the Commissioner’s retroactive application of the changed interpretation of a tax law was manifestly unfair, since they detrimentally relied on the original, longstanding interpretation of the law in planning their financial affairs. The Court disagreed:
Even accepting the notion that the Commissioner’s present position represents a departure from prior administrative practice, which is by no means certain, it is well established that the Commissioner may change an earlier interpretation of the law, even if such a change is made retroactive in effect. E.g., Dixon v. United States, 381 U.S. 68, 72-75 [85 S.Ct. 1301, 1304-05, 14 L.Ed.2d 223] (1965); Automobile Club of Michigan v. Commissioner, 353 U.S. 180, 183-184 [77 S.Ct. 707, 709-10, 1 L.Ed.2d 746] (1957). This rule applies even though a taxpayer may have relied to his detriment upon the Commissioner’s prior position. Dixon v. United States, supra [381 U.S.] at 73 [85 S.Ct. at 1304], The Commissioner is under no duty to assert a particular position as soon as the statute authorizes such an interpretation. See also Bob Jones University v. United States, 461 U.S. 574 [103 S.Ct. 2017, 76 L.Ed.2d 157] (1983).
Id. at 343, 104 S.Ct. at 1094 (footnotes omitted). Accordingly, it is our judgment that defendants’ “detrimental reliance” argument is unavailing. See id.; Commissioner v. Miller, 914 F.2d 586, 591-92 (4th Cir.1990); Cohen v. Commissioner, 910 F.2d 422, 427-28 (7th Cir.1990); Heitzman v. Commissioner, 859 F.2d 783, 786 (9th Cir.1988); Canton Police Benevolent Ass’n v. United States, 844 F.2d 1231, 1236-38 (6th Cir.1988); Consolidated Edison Co. v. United States, 782 F.2d 322, 325 (2d Cir.1986) (per curiam); Fogarty v. United States, 780 F.2d 1005, 1011 (Fed. Cir.1986); Becker v. Commissioner, 751 F.2d 146, 150 (3d Cir.1984); Yarbro v. Commissioner, 737 F.2d 479, 483 (5th Cir. 1984), cert. denied, 469 U.S. 1189, 105 S.Ct. 959, 83 L.Ed.2d 965 (1985).
Defendants also contend that the plaintiffs failed to prove that the Plan was sufficiently funded at the time of the partial termination to provide benefits. We see no error in the district court’s conclusion, based upon recommendations by the IRS, which the court sought with the consent of the parties, that the Plan was sufficiently funded at the time of the partial termination.
Finally, we conclude the district court did not abuse its discretion in any way regarding its award of attorneys’ fees.
We have considered plaintiffs’ and defendants’ remaining arguments and find them to be without merit.
The petition for rehearing is granted. Parts III and IV of the prior opinion of this Court are vacated, and the judgment of the district court is affirmed.
. The Handbook was first brought to this Court's attention in plaintiffs' petition for rehearing. In their petition, plaintiffs also refer us to footnote two of a General Counsel Memorandum in which the "percentage reduction in [plan] participation” was measured "by dividing the total participant terminations during the plan year by the sum of the employee-participants at the beginning of the plan year plus the participants added during the plan year.” Gen. Couns.Mem. 39344 (Oct. 16, 1984).
. Section 401(a)(7) currently provides: "A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part satisfies the requirements of section 411 (relating to minimum vesting standards)." 26 U.S.C. § 401(a)(7) (1988).
Question: What is the nature of the second listed respondent whose detailed code is not identical to the code for the first listed respondent?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_method
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine the nature of the proceeding in the court of appeals for the case, that is, the legal history of the case, indicating whether there had been prior appellate court proceeding on the same case prior to the decision currently coded. Assume that the case had been decided by the panel for the first time if there was no indication to the contrary in the opinion. The opinion usually, but not always, explicitly indicates when a decision was made "en banc" (though the spelling of "en banc" varies). However, if more than 3 judges were listed as participating in the decision, code the decision as enbanc even if there was no explicit description of the proceeding as en banc.
UNITED STATES of America, Plaintiff, Appellee, v. CERTAIN LAND LOCATED IN the COUNTY OF BARNSTABLE, etc., et al., Defendants, Appellees. Appeal of Grace E. BESSAY, Defendant.
No. 88-2029.
United States Court of Appeals, First Circuit.
Heard May 4, 1989.
Decided Nov. 17, 1989.
Jeffrey B. Axelrod, with whom Cynthia L. Amara, Gregor I. McGregor, McGregor, Shea & Doliner, P.C., William P. Homans, Jr., and Homans, Hamilton, Dahmen & Marshall, Boston, Mass., were on brief, for appellant.
David C. Shilton, Appellate Staff, Land & Natural Resources Div., Washington, D.C., with whom Donald A. Carr, Acting Asst. Atty. Gen., Jeremiah T. O’Sullivan, U.S. Atty., Nicholas C. Theodorou, Asst. U.S. Atty., Boston, Mass., Jacques B. Gelin, Maria A. Iizuka, Dept, of Justice, Washington, D.C., and Robin Lepore, Office of Sol., Dept, of Interior, Boston, Mass., were on brief, for U.S.
Before BOWNES and TORRUELLA, Circuit Judges, and RE, Judge.
The Honorable Edward D. Re, Chief Judge of the United States Court of International Trade, sitting by designation.
RE, Judge:
Defendant-appellant, Grace E. Bessay, appeals from a judgment of the United States District Court of the District of Massachusetts which held that her “cottage” was not “improved property,” and, therefore, was not exempt from condemnation under the Cape Cod National Seashore Act, 16 U.S.C. § 459b et seq. (1982) (the Act). The district court concluded that, “[fjirst, the cottage does not qualify as a one-family dwelling[,] [and] [s]econd, the evidence is insufficient to establish that the same person owned both the cottage and land on which it rested as of September 1, 1959.” United States v. Certain Land Located in the County of Barnstable, No. 67-988-N, slip op. at 6 (D.Mass. Sept. 15, 1988).
The question presented on this appeal is whether the cottage owned by Bessay is “improved property” within the meaning of the Act, and, therefore, exempt from condemnation.
Since we hold that the district court correctly held that Bessay’s cottage was not “improved property” because it did not qualify as a “one-family dwelling,” we affirm. Hence, it is unnecessary to decide the issue of the date of ownership of the cottage and the land.
BACKGROUND
This case is one of a series that resulted from the 1967 condemnation of 251 acres of land in Provincetown, Massachusetts, pursuant to the Act, by the United States Department of the Interior. It traces its origins to a dispute between Andrew Fuller, Bessay’s predecessor in interest, and adjoining landowners, who are referred to as the Beede Group. Fuller claimed ownership of a certain structure or “shack” and the surrounding land through the adverse possession of his predecessor in interest, Dorothy Fearing. On January 30, 1978, the Beede Group filed a petition for a determination of title, requesting a finding that they owned the entire 251 acres in question.
The District Court for the District of Massachusetts issued an order “declaring the Beedes to be seised and possessed of a good title to the entire tract in fee simple.” United States v. Certain Land Located in the County of Barnstable, 491 F.Supp. 1252, 1256 (D.Mass.1980). The court also declared that “Mr. Fuller ha[d] failed to show that the Fearings acquired a good title by adverse possession, and ...[,] [therefore,] Fuller ha[d] no title to any land on the locus and owns only the shack itself.” Id. at 1257 (citations omitted).
The executrix of Fuller, Grace Bessay, appealed to this court, and we reversed on the question of adverse possession. We held that “[t]he Beedes were not only not the true owners, they could not even claim prior constructive possession of the lot.... Bessay, on the other hand, ha[d] possessory title tracing back through Fuller to Dorothy Fearing_” United States v. Certain Land Located in the County of Barnstable, 674 F.2d 90, 95 (1st Cir.1982). On that appeal, we declined to “reach any claim against the government on account of the shack or lot being ‘improved property,’ ” and remanded the case to the district court. Id. at 96.
On remand, the district court made certain determinations as to deed measurements and ownership of the land. Most pertinent here is its finding “that the cottage owned by Grace Bessay does not constitute ‘improved property’ under the Cape Cod National Seashore Act and is therefore subject to condemnation by the government.” Certain Land Located in the County of Barnstable, No. 67-988-N, slip op. at 9. In the present case, Bessay appeals only that portion of the decision of the district court which relates to the “improved property” exemption under the Act.
DISCUSSION
Because the increasing popularity of Cape Cod threatened to jeopardize the historic and scenic integrity of the area, in 1961, Congress established the Cape Cod National Seashore Act, 16 U.S.C. § 459b et seq. (1982), to ensure the preservation of the region. Rather than exclude all persons from owning or living on the land within the seashore, persons who had owned homes in the area for a certain period of time were permitted to remain.
In pertinent part, the Act provides that the authority of the Secretary of the Interi- or to acquire property in the Cape Cod region shall:
(1) ... be suspended with respect to all improved property located within such area in all of the towns referred to in section 459b of this title for one year following August 7, 1961.
(2) Thereafter such authority shall be suspended with respect to all improved property located within such area in any one of such towns during all times when such town shall have in force and applicable to such property a duly adopted, valid zoning bylaw approved by the Secretary in accordance with the provisions of section 459b-4 of this title.
16 U.S.C. § 459b-3(b) (1982) (emphasis added).
Under the Act, “improved property” is defined as:
a detached, one-family dwelling the construction of which was begun before September 1, 1959 ... together with so much of the land on which the dwelling is situated, the said land being in the same ownership as the dwelling, as the Secretary shall designate to be reasonably necessary for the enjoyment of the dwelling for the sole purpose of noncommercial residential use, together with any structures accessory to the dwelling which are situated on the land so designated. The amount of the land so designated shall in every case be at least three acres in area, or all of such lesser amount as may be held in the same ownership as the dwelling....
16 U.S.C. § 459b-3(d) (emphasis added).
As we stated in our decision in United States v. 7.92 Acres of Land (I), 769 F.2d 4, 8 (1st Cir.1985), there is “no doubt that the ‘improved property’ exemption of the Act has been designed and interpreted to prevent the eviction of bona fide or actual homeowners from established residences, thereby accommodating ‘the legitimate interests of existing residents.’ ” (quoting S.Rep. No. 428, 87th Cong., 1st Sess., reprinted in 1961 U.S.Code Cong. & Admin. News 2212, 2220) (emphasis in original).
In the present case the Town of Prov-incetown has enacted zoning ordinances approved by the Secretary. Consequently, in determining whether Bessay’s cottage qualified for the “improved property” exemption, the district court had to decide whether the cottage was a “detached, one-family dwelling” within the statutory definition. The district court held that the cottage did not qualify for the exemption.
Bessay, in her brief, contends that the “plain language of the Act mandates that [the cottage] be classified as a dwelling entitled to improved property status.” In her reply brief she further argues that “[t]he Department improperly urges the [c]ourt to employ a theory of statutory interpretation that ignores the plain and ordinary meaning of the word ‘dwelling.’ ” We disagree.
The nature and purpose of the Act, as well as the meaning of “dwelling,” is not new to this court. In 7.92 Acres of Land (I), Bessay acquired two tracts of land in 1963 where there existed the remains of a structure that had been built in the 1930’s. Bessay stated that, after 1959, but prior to 1963, the structure was partially burned. Sometime after 1963, the remaining portion of the structure was also burned. Bessay claimed that “since there [was] evidence that a ‘dwelling’ existed on her land prior to 1959, she ha[d] ‘rebuilding rights,’ and, therefore, [was] entitled to an exemption from condemnation [as ‘improved property’] under section 459b-3 of the Act.” 7.92 Acres of Land (I), 769 F.2d at 7.
We held that “[s]ince there was no dwelling on Bessay’s land at the time of the taking, and the land [was] unbuildable, ... [Bessay] ha[d] no rebuilding rights.... ” Id. at 9. In addition, we noted that:
[T]he structure ... was never served by utilities, had no waste disposal facilities, and permits for such services or facilities were never obtained or issued. Clearly, the legislative history and the case law interpreting the Act reveal that Congress did not intend to include within the definition of “improved property” the kind of structure which may have existed on Bessay’s land.
Id. at 8; see generally P. Rohan & M. Reskin, Condemnation Procedures & Techniques § 14.04[4] (Supp.1988).
In United States v. 7.92 Acres of Land (II), No. 86-1825, slip op. at 2 (1st Cir. Aug. 31, 1987) [831 F.2d 281 (table)], cert. denied, 484 U.S. 1011, 108 S.Ct. 711, 98 L.Ed.2d 661 (1988), the structure in question “consisted of a ten by ten foot shack. It contained no plumbing, no electricity, no septic system and no foundation.” (citations omitted). The structure contained a “chemical toilet [and] a primer stove.” Id. Bessay stated that she “used rain water for washing and brought in fresh water for drinking.” Id. In 1972, Bessay applied to the National Park Service for a Certificate of Suspension from condemnation on the ground that her property was “improved property” within the meaning of the Act. Her application was denied by the Department, and the district court held that the property was not “improved.” See United States v. 7.92 Acres of Land (II), No. 75-3546-C, slip op. at 6 (D.Mass. Mar. 31, 1982). In affirming, we noted that, in light of our discussion of “improved property” in 7.92 Acres of Land (I), and because of the lack of “permits for utility service or waste disposal,” it was evident that “Bessay’s property was not improved so as to suspend the Secretary’s condemnation powers.” 7.92 Acres of Land (II), No. 86-1825, slip op. at 2-3.
The structure in the present case, which is referred to by Bessay as a “cottage,” consists of a two room wooden structure, eighteen and-a-half by sixteen-and-a-half feet, with a five foot wide porch along its length, on a foundation of wooden posts or pilings imbedded in the sand. The cottage has no plumbing, no electricity, no insulation, no built-in waste disposal or bathing facilities. It is lighted by kerosene lamps, and, is serviced by gas appliances, a water pump located approximately 200 feet east of the structure, and a portable chemical toilet.
It cannot be questioned that, guided by what we have said in our prior cases, Bes-say’s cottage is not a “dwelling.” Bessay, nonetheless, claims that the cottage at issue in this case differs from the structures that we examined in the prior cases. In her reply brief, she argues that, unlike the structure in 7.92 Acres of Land (I), where “there was no existing structure on the property, at the time of the taking, and the land was unbuildable because it was a coastal bank,” here her cottage “has been located on the property at all times relevant to this appeal” and “has been inhabited continuously during the warmer months.... ” Furthermore, she adds that this case differs from the one in 7.92 Acres of Land (II) because in this case her “house and its foundation are significantly larger and more durable than those in [7.92 Acres of Land (II)]” and “[ejlectric utilities, have never been available at [this] site, whereas they were available at the ... site [in 7.92 Acres of Land (II)].”
In our present inquiry it is noteworthy that the district court found that “[p]rior to trial, Bessay herself agreed that the structures in the present case and in United States v. 7.92 Acres of Land (II) ... were substantially similar.” Certain Land Located in the County of Barnstable, No. 67-988-N, slip op. at 7. Our examination of the record also confirms that, in a “Joint Status Report” prepared before trial, Bes-say did “agree that the structures in the present case and in [7.92 Acres of Land (II)] are substantially similar.” Hence, notwithstanding the distinctions that are stressed by Bessay on this appeal, the district court was correct in concluding that the distinctions “are insufficient to convert the cottage into ‘improved property.’ ” Id. Furthermore, from the description of the cottage and from what we said in our prior cases, it is clear that “Congress did not intend to include within the definition of ‘improved property’ the kind of structure which ... existed [here].” See 7.92 Acres of Land (I), 769 F.2d at 8.
Notwithstanding the explanations offered at the trial and in Bessay’s appellate briefs, it is crystal clear that, without electricity and plumbing, the cottage did not meet the Minimum Standards of Fitness for Human Habitation promulgated by the Massachusetts Department of Public Health on March 8, 1955, and the Province-town Health Department Regulations adopted on July 15, 1957.
The Provincetown Health Department Regulations require approved septic systems, piped in water supply and an adequate number of “water closets, lavatories, bathtubs or showers_” The Regulations also state that “[e]very kitchen sink, lavatory and bathtub or shower ... shall be properly connected to both hot and cold water lines.” (emphasis in original). Additionally, the Massachusetts Minimum Standards of Fitness for Human Habitation require “a kitchen sink in good working condition and properly connected to water and sewer systems ... [and] [w]here connection ... is not practicable, a dwelling shall be served by cesspools, septic tanks or other means of subsurface disposal of sewage. ...”
At the trial, both Bessay and her witness, Peter Clemons, acknowledged that there are no pipes which connect a water supply to the cottage, that the kitchen sink is not connected to the water, that there is no bathtub or shower, and that there are no water heating facilities in the cottage. See Record at 60-61, 112, 116, Certain Land Located in the County of Barnstable (No. 67-988-N). Hence, Bessay’s contention that the cottage meets the criteria set forth in the Massachusetts Minimum Standards of Fitness for Human Habitation is contradicted by the facts and the trial testimony.
In her reply brief, as an alternative argument, Bessay contends that the Department “incorrectly asserts that a structure must meet standards found in local and state health laws in order to be considered a ‘dwelling’_” (emphasis in original). According to Bessay, “[t]he Act merely provides that the Department shall issue regulations specifying standards for approval by the Department of a town’s zoning bylaws.” She asserts that “[t]he Provincetown Zoning Bylaw ... does not make any mention of local or state health statutes_” (emphasis in original).
The Act provides that the authority of the Secretary to acquire property by condemnation shall be suspended as to all improved property “when such town shall have in force and applicable to such property a ... valid zoning bylaw approved by the Secretary_” 16 U.S.C. § 459b-3(b)(2). This provision, which suspends the Secretary’s power to condemn improved property during the existence of a valid zoning bylaw, was enacted because “Congress could not enact local zoning ordinances to avoid condemnation....” 7.92 Acres of Land (I), 769 F.2d at 8. The legislative history of the Act acknowledges that:
If the Federal Government ... is to establish a national seashore in such a way as not to interfere with the continued ownership and enjoyment of ... property by private landowners ..., it is only reasonable that the communities involved adopt zoning laws which will assure that the property within the seashore will be used in a manner consistent with the purposes of the seashore.
S.Rep. No. 428, 87th Cong., 1st Sess., reprinted in 1961 U.S.Code Cong. & Admin. News 2212, 2235. “Once such a bylaw is approved [by the Secretary], the Secretary becomes powerless to condemn improved property within that town[ ] ... as long as that improved property is put to a use consistent with the bylaw.” United States v. Certain Lands in Truro, 476 F.Supp. 1031, 1033 (D.Mass.1979).
Prior case law had defined “improved property” consistently with the requirements of state and local law. It is not unreasonable, therefore, to look to this criteria when examining the cottage. Furthermore, as stated by the district court in United States v. 7.92 Acres of Land (II), “[w]hether a particular structure conforms with existing state health laws is pertinent, objective evidence with respect to its legal status as a dwelling.” No. 75-3546-C, slip op. at 6.
CONCLUSION
In agreement with our prior decisions as to the nature and purpose of the Act, and the findings and conclusions of the district court, we hold that the structure that is the subject of this litigation is not “improved property” within the meaning of the Cape Cod National Seashore Act.
Since we agree with the district court that Bessay’s “cottage does not qualify as a one-family dwelling,” and, therefore, is not exempt from condemnation as “improved property,” we need not decide whether the land and building were in the same ownership in September of 1959. Therefore, the judgment of the district court is affirmed.
Question: What is the nature of the proceeding in the court of appeals for this case?
A. decided by panel for first time (no indication of re-hearing or remand)
B. decided by panel after re-hearing (second time this case has been heard by this same panel)
C. decided by panel after remand from Supreme Court
D. decided by court en banc, after single panel decision
E. decided by court en banc, after multiple panel decisions
F. decided by court en banc, no prior panel decisions
G. decided by panel after remand to lower court
H. other
I. not ascertained
Answer:
|
songer_casetyp1_7-3-2
|
A
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation - torts".
Joseph F. GREENE, Jr., Administrator of the Estate of John F. Barnett, Jr., Deceased, v. MORELLI BROS. v. Michael TORNETTA et al. (Third Party-Defendants), Michael Tornetta, Appellant. Joseph F. GREENE, Jr., Administrator of the Estate of John F. Barnett, Jr., Deceased, v. Thomas W. MORELLI and Charles P. Morelli, individually and trading as Morelli Bros., a partnership, v. Michael TORNETTA et al. (Third Party-Defendants), Michael Tornetta, Appellant.
Nos. 19371-19372.
United States Court of Appeals, Third Circuit.
Argued Oct. 7, 1971.
Decided June 26, 1972.
Joseph Head, Swartz, Campbell & Detweiler, Philadelphia, Pa., for appellant.
Thomas Burke, Haws & Burke, Ardmore, Pa., for appellee.
Before KALODNER, STALEY and ADAMS, Circuit Judges.
OPINION OF THE COURT
KALODNER, Circuit Judge.
These diversity actions were instituted in the United States District Court for the Eastern District of Pennsylvania to recover damages for the death of the plaintiff’s decedent as a result of a collision between a tractor-trailer owned by the defendants (here collectively called “Morelli”) and a Ford Falcon, operated by the third-party defendant (here called “Tornetta”), in which the plaintiff’s decedent was a passenger.
These appeals are prosecuted by Tornetta, from the judgments following the jury verdict, holding him liable for contribution to the defendants, Morelli, for the judgment entered upon the jury verdict in favor of the plaintiff against Morelli. Tornetta here contends that there were errors at the trial and in the instructions to the jury which entitle him to a new trial; he further contends, having followed the proper procedural steps, that he is entitled to judgment notwithstanding the verdict.
We hold that the third-party defendant, Tornetta, is entitled to judgment because, as he has contended, the record fails to show negligence on his part which was a substantial factor in producing the collision. Haldeman v. Bell Telephone Company of Pennsylvania, 387 F.2d 557 (3d Cir.1967), in which we recited and applied the applicable principles of law.
The accident here involved occurred at about 10:30 o’clock p. m. on June 17, 1965, on Johnson Highway, approximately 35 feet west of the intersection of that road with DeKalb Pike, near Norristown, Montgomery County, Pennsylvania. It was drizzling at that time. Johnson Highway has two eastbound lanes, each about 10 feet wide, and a westbound lane, about 16 feet wide. DeKalb Pike is about 36 feet wide, with two traffic lanes, one for southbound traffic and the other for northbound traffic; however, DeKalb Pike is one way, northbound, from the north side of the intersection with Johnson Highway, the southbound lane being blocked off so that southbound traffic cannot enter.
Tornetta’s Ford Falcon was traveling in the southernmost or curb lane, eastbound on Johnson Highway. The Morelli tractor-trailer, which was 45 feet long and, loaded with coal, weighed approximately 60,000 pounds, had been proceeding south on DeKalb Pike. It was operated by one Farrell. Farrell, intending to proceed west on Johnson Highway, made a sweeping wide right turn in the intersection, which brought his vehicle into the middle eastbound lane instead of the westbound lane; Farrell then headed his vehicle into the southernmost eastbound lane, there colliding with Tornetta’s Falcon. The tractor-trailer pushed the Falcon over the curb and the sidewalk and into an adjoining field, some 30 feet, the tractor ending up on top of the Falcon, which had turned on its side. There is no dispute that Tornetta was at all times in his proper traffic lane, and that Farrell was not.
Under the applicable Pennsylvania law, Farrell was prima facie negligent, Nixon v. Chiarilli, 385 Pa. 218, 221, 122 A.2d 710, 712 (1956), since he was operating his tractor-trailer on the wrong side of the road. See also Fetsko v. Greyhound Corporation, 461 F.2d 754 (3d Cir. May 23, 1972); Haddigan v. Harkins, 441 F.2d 844 (3d Cir. 1970). However, as the last cited cases show, the defendants Morelli were entitled to attempt to prove, as it was their burden to do, that Tornetta was negligent and that his negligence was either a superceding cause of or a substantial factor in producing the accident. Cf. Klena v. Rutkowski, 432 Pa. 509, 248 A.2d 9 (1968).
Since the testimony of other witnesses to the accident would have cleared Tornetta of negligence, we look to the testimony of Morelli’s driver, Farrell. He testified that he observed two vehicles approaching him on Johnson Highway: one was a “blue car” traveling in the middle eastbound lane of Johnson Highway, and the other was the Tornetta Falcon, traveling in the curb or southernmost eastbound lane of Johnson Highway. His testimony was that when he made this observation, the two vehicles were about 200 feet away, but the “blue car” was nearer, and that they were both traveling about 60 miles per hour. He said that when he entered the lane of the “blue car” he saw that it was bearing down on top of him and was right in front of him when it started to swerve to go around the back of his trailer. He was unable to estimate the distance “because this happens in split seconds. There is no time involved. This happened very, very fast.” (N. T. p. 338). He said he was watching both cars (i. e., the “blue car” and the Tornetta car); that the Tornetta car was still in the curb or southernmost eastbound lane, but he did not know how far away it was: although he was watching it all the way up to the accident. He also said that he was traveling between 10 to 15 miles per hour, with his vehicle under control and his foot on the brake. He said that when he saw the “blue car” bearing down on him, he proceeded into the curb or southernmost eastbound lane being traveled by Tornetta. According to him, this was to avoid colliding with the “blue car,” which, he said, actually went around the rear of the tractor-trailer. It may be noted that as appears from the exhibits, in view of the length of the tractor-trailer and the widths of the roadways, to accomplish this the “blue car” had to proceed into the westbound lane of Johnson Highway into the intersection. Farrell testified that immediately after the accident he observed the “blue car” proceeding on Johnson Highway beyond the intersection. Despite the estimated speed of 60 miles per hour, the Tornetta vehicle which, according to Farrell struck the right front bumper and fender of the tractor, did not veer off but stayed with the tractor, and was pushed as we have already stated. The defendants Morelli also offered the testimony of a metallurgical expert, who stated as his opinion that at the time of the accident the minimum speed of the Tornetta vehicle was “considerably in excess of 30 miles an hour.” It would appear from the record that the speed limit in the area of the accident was 40 miles per hour.
The jury found that Farrell, the defendants’ driver was responsible. It could not have found otherwise on this record. In so doing, it rejected the defendants’ defense of sudden emergency which the instructions of the court would have permitted the jury to accept. We think such instruction gave the defendants more than they were entitled to on the record, for such defense is not available to one whose own conduct created the emergency. Fetsko v. Greyhound Corporation, supra.
But the issue on this appeal is whether Tornetta’s negligence in operating his vehicle at an excessive speed, which is assumed arguendo, was a substantial factor in causing the accident. On this score, the defendants are not aided by the “assured clear distance ahead” principle. The Pennsylvania courts have held this principle to be inapplicable to cases where the obstacle is not a fixed one but is traveling toward the driver. See Long v. Pennsylvania Truck Lines, Inc., 335 Pa. 236, 238-239, 5 A.2d 224, 225 (1939). Moreover, as therein stated, a traveler on a highway who keeps to his own side of the road is under no obligation to keep his eyes riveted to the road and to anticipate negligence. The failure to anticipate negligence is not negligence. Nixon v. Chiarilli, supra. Tornetta’s obligation to anticipate reasonable risks, did not include the obligation to anticipate that Farrell would violate the Pennsylvania Motor Vehicle Code by driving on the wrong side of the road. Cf. Schofield v. Druschel, 359 Pa. 630, 59 A.2d 919 (1948).
In these circumstances, it was the burden of the defendants to produce evidence from which a trier of fact could reasonably conclude that at the time the defendants’ tractor-trailer improperly entered Tornetta’s traffic lane, the time and distance between the two vehicles was such as would have enabled Tornetta to avoid the collision if he was attentive and was not traveling at an excessive rate of speed. Compare Schofield v. Druschel, supra, with Sudol v. Gorga, 346 Pa. 463, 31 A.2d 119 (1943); Haldeman v. Bell Telephone Company of Pennsylvania, supra. This time-distance factor would have to measure, of course, from the moment when Tornetta saw, or should have seen sudden entry of the tractor-trailer in his lane of travel.
The record is barren of such evidence. As we have stated, Farrell’s testimony was that he entered the middle eastbound lane of Johnson Highway intending to swing into the westbound lane; he realized that the “blue car” was bearing down on top of him; he swung to the left and into the curb or southernmost eastbound lane traveled by Tornetta. To use his own words, “[t]o prevent an accident, I swinged the tractor to the left and then No. 1 ear [Tornetta’s Falcon] runs into the tractor. . . .” (N. T. p. 225). The clear implication of immediacy of collision is borne out by the volunteered statement by Farrell, “[a]s a matter of fact, all this happened in split seconds.” (N. T. p. 247). It may be noted that Farrell did not make his determination of the speed of the two eastbound vehicles until the “blue car” was “on top of me.” (N. T. p. 234). Although Farrell testified that he watched both vehicles, and continued watching the Falcon until the accident, he was unable to say where the Falcon was, other than that it was in the curb lane when the “blue car” swerved to go around the back of the trailer. The “blue ear” swerved when it was right in front of him, bearing right down on top of him; he could not say that it was one car length away “because this happens in split seconds. There is no time involved.” (N. T. p. 338). There is no specific statement by Farrell relating in terms of time or distance his own turn to his left into the curb lane with the swerve of the “blue car,” but he did say that he made his move to the left when he realized that the “blue ear” was going to hit him. (N. T. p. 260). There is no specific testimony as to the distance of- the Falcon from the tractor at the time the latter entered the curb lane. Farrell was not asked to estimate the time he was in the curb lane before he collided with the Falcon.
This evidence affords but one conclusion, and that is that Farrell suddenly turned into Tornetta’s lane of travel and was hit almost immediately. Even according to Farrell, split-second timing was involved. In any event, the record does not afford a reasonable conclusion that Tornetta had, if he were attentive and driving at a lawful rate of speed, the necessary time to avoid the collision. Such a conclusion could only be the result of conjecture.
As we stated in Haldeman v. Bell Telephone Company of Pennsylvania, at 387 F.2d 559:
“It is axiomatic that in the trial of a case like this plaintiffs ‘ * * * must make it appear that it is more likely than not that the conduct of the defendant was a substantial factor in bringing about the harm, A mere possibility of such causation is not enough; and when the matter remains one of pure speculation and conjecture, or the probabilities are at best evenly balanced, it becomes the duty of the court to direct a verdict for the defendant.’ Restatement (Second), Torts § 433B, Comment a at 442 (1965).”
For the reasons stated, the judgment of the District Court entered against the third-party defendant, Tornetta, will be reversed and the cause remanded to the District Court to enter judgment notwithstanding the verdict in Tornetta’s favor.
. Tlie tractor-trailer was operated by Morelli’s employee Farrell, and there is no dispute as to agency. The defendants, Morrelli, had also filed third-party corn-plaints against the owners of the Ford Falcon, but these were withdrawn at the commencement of the trial in the court below.
. As to the standards of review, see Gatenby v. Altoona Aviation Corporation, 407 F.2d 443 (3d Cir. 1968) ; see also Mihalchak v. American Dredging Company, 266 F.2d 875, 877 (3d Cir. 1959), cert. denied, 361 U.S. 901, 80 S.Ct. 209, 4 L.Ed.2d 157. Cf. Haldeman v. Bell Telephone Company of Pennsylvania, 387 F.2d 557 (3d Cir. 1967).
. On cross-examination, Farrell repeatedly characterized these approximations as a guess made under prodding to state the figures, apparently during pre-trial oral depositions. We recognize that a “guess” may actually be an estimate rather than conjecture: see Livergood v. S. J. Groves & Sons Company, 361 F.2d 269 (3d Cir. 1966) ; Finnerty v. Darby, 391 Pa. 300, 138 A.2d 117 (1958). Indeed, Farrell conceded that the speed of the approaching vehicles could have been 40 miles per hour. What is of concern is the admission of Farrell that he was not in a position to make the estimate: “I told you before I do not know how far this car — this car is coming towards me, and how far back on Johnson Highway it was I do not know. There is no way it — that anybody can figure out a car coming towards you, and you can estimate the speed of it, nor how far back he was, and that’s what you are trying to figure out now mathematically.” (N.T. p. 335).
Question: What is the specific issue in the case within the general category of "economic activity and regulation - torts"?
A. motor vehicle
B. airplane
C. product liability
D. federal employer liability; injuries to dockworkers and longshoremen
E. other government tort liability
F. workers compensation
G. medical malpractice
H. other personal injury
I. fraud
J. other property damage
K. other torts
Answer:
|
songer_r_fed
|
1
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "the federal government, its agencies, and officials". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
John J. McCARTHY, Plaintiff-Appellant, v. Mr. MADDIGAN, Dr. Perry; Dr. Walter; Dr. Delmuro, Defendants-Appellees.
No. 90-3112.
United States Court of Appeals, Tenth Circuit.
April 22, 1992.
Before McKAY, Chief Circuit Judge, and MOORE and BRORBY, Circuit Judges.
ORDER
Mr. McCarthy, a federal prisoner, filed a Bivens — type civil action seeking monetary damages for the alleged deliberate indifference to his serious medical needs. The district court, relying upon Brice v. Day, 604 F.2d 664, 666-68 (10th Cir.1979), cert. denied, 444 U.S. 1086, 100 S.Ct. 1045, 62 L.Ed.2d 772 (1980), dismissed the claim without prejudice as Mr. McCarthy failed to demonstrate he had made use of the administrative review process provided by the Bureau of Prisons. We affirmed, being bound by our precedent in Brice. See McCarthy v. Maddigan, 914 F.2d 1411 (10th Cir.1990).
The Supreme Court reversed this court’s decision holding that exhaustion of the Bureau of Prison’s administrative procedure is not required before a federal prisoner can initiate a Bivens action solely for monetary damages. See McCarthy v. Maddigan, — U.S. —, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992).
We therefore recall our mandate and reverse the order of the district court and remand this case to the district court for such further proceedings as may be just and proper in accordance with the decision of the United States Supreme Court.
The mandate shall reissue forthwith.
. Bivens v. Six Unknown Named Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971).
Question: What is the total number of respondents in the case that fall into the category "the federal government, its agencies, and officialss"? Answer with a number.
Answer:
|
songer_genapel1
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed appellant.
SOLO CUP COMPANY, Plaintiff-Appellant, v. FEDERAL INSURANCE COMPANY, Defendant-Appellee.
No. 79-1528.
United States Court of Appeals, Seventh Circuit.
Argued Nov. 8, 1979.
Decided April 11, 1980.
Rehearing Denied May 16, 1980.
Shayle P. Fox, Chicago, Ill., for plaintiff-appellant.
John E. Guy, Abramson & Fox, Chicago, Ill., for defendant-appellee.
Before PELL and BAUER, Circuit Judges, and DUMBAULD, Senior District Judge.
Senior District Judge Edward Dumbauld of the Western District of Pennsylvania is sitting by designation.
PELL, Circuit Judge.
This is an appeal by the plaintiff Solo Cup Company (Solo) from a judgment in favor of the defendant, Federal Insurance Company (Federal). Jurisdiction is based on diversity of citizenship. The district court concluded that the law of Illinois governed substantive questions, and the parties do not challenge this determination on appeal. The principal issue presented for review is whether the lower court erred in holding that there was a lack of coverage under an insurance policy for sums paid in settlement of an employment discrimination action brought pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e — 2000e — 17 (1970 & Supp. II 1972).
I.
On January 24, 1974, Federal issued an “Umbrella Excess Liability Policy” to Solo which imposed both indemnity and defense obligations upon the insurer. The relevant indemnity provisions obligated Federal to secure Solo against any “ultimate net losses” which it might suffer as a result of “occurrences” of covered “personal injuries.”
An “occurrence” was defined as
an accident or happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury . All such exposure to substantially the same conditions existing at or emanating from one premise or location shall be deemed one occurrence.
Policy Definition 5. (Emphasis supplied.)
The term “personal injuries” was broadly defined in Policy Definition 2 to include
bodily injury, mental injury, mental anguish, shock, sickness, disease, disability, false arrest, false imprisonment, wrongful evictions, detention, malicious prosecution, discrimination, humiliation; also libel, slander or defamation of character or invasion of rights of privacy. .
(Emphasis supplied.)
Finally, covered “ultimate net losses” included not only sums the insured became obligated to pay through adjudication or compromise, but also
sums paid as salaries, wages, compensation, fees, charges and law costs, premiums on attachment or appeal bonds, interest, expenses for . . . lawyers and for litigation, settlement, adjustment and investigation of claims and suits which are paid as a consequence of any occurrence covered hereunder.
Policy Definition 6.
In addition to the inclusion of defense costs as a part of the ultimate net loss for which Solo was entitled to indemnity, however, there had been added to the policy “Endorsement No. 1 — Supplementary Payments,” which imposed the following separate and distinct defense obligation upon Federal:
It is agreed that, with respect to any occurrence not covered by the underlying policies . . . but covered by the terms and conditions of this policy . the company shall:
(A) Defend any suit against the insured alleging such injury and seeking damages on account thereof, even if such suit is groundless, false or fraudulent. .
While the policy was in force, Anne Willard, an employee in Solo’s Atlanta, Georgia, facility, filed a charge with the Equal Employment Opportunity Commission (EEOC), in which she alleged that Solo’s failure to promote her was sexually discriminatory. Thereafter, on May 6, 1976, the EEOC filed against Solo in the Northern District of Georgia an action seeking broad compensatory and injunctive relief for an alleged class of female discriminatees. The complaint included allegations of intentional discrimination.
Separately, on November 16, 1976, the General Services Administration (GSA) conducted an on site review of Solo’s Grand-view, Missouri, facility to determine whether Solo, as a government contractor, had complied with the mandate of Executive Order 11246 and its implementing regulations to refrain from employment discrimination. This compliance review resulted in an administrative allegation that Solo had discriminated against seventy-two female employees with respect to initial job placement. While the GSA proposed that Solo pay the alleged discriminatees $266,667 in backpay and interest as a basis for conciliation, the record does not indicate that any debarment proceedings have been commenced against Solo to date to enforce its alleged liability.
In a letter dated February 17, 1977, Solo advised Federal of both the EEOC action and the GSA compliance review, and asserted that both matters were within the coverage of the policy. Federal immediately disclaimed coverage as to the EEOC matter, and thereafter asserted in its answer to plaintiff’s amended complaint below that the GSA review was merely investigative and that Federal therefore had no obligation to defend.
On May 4, 1977, Solo advised Federal of its intention to settle the EEOC litigation, and subsequently entered into a consent decree in the Northern District of Georgia. Pursuant to the terms of the decree, Solo paid the charging party, Anne Willard, $25,-000. The decree recited, however, that its entry did not “constitute or operate as an acknowledgement or admission” that Solo had violated Title VII. Equal Employment Opportunity Commission v. Solo Cup Company, No. C 76-806 (N.D.Ga. May 31,1977).
Solo then commenced this action seeking indemnity for legal fees, costs, and sums paid in settlement of the EEOC action, for legal fees paid in conjunction with the GSA review, and additionally a declaration of its right to indemnity for any sums paid as a result of the administrative claim of back-pay liability.
The district court granted Federal’s motion for summary judgment as to all issues. The court reasoned that Federal could have no indemnity or defense obligations toward Solo with respect to the EEOC action because the EEOC complaint contained allegations of intentional discrimination which were inconsistent with the policy definition of an insured “occurrence.” With respect to coverage of the claims related to the GSA review, the court held that the insurer had no duty to defend against administrative procedures, and that the question of whether any claim resulting from the GSA review could constitute an insured occurrence did not present an actual controversy within the meaning of the Declaratory Judgment Act, 28 U.S.C. § 2201, or Article III of the Constitution, U.S.Const. art. Ill, §2.
II.
A. The EEOC Action
The contract of insurance at issue in this litigation imposed an absolute duty upon Federal to provide a defense in any actions filed against Solo charging the occurrence of an injury within the coverage of the policy. It is well settled under the law of Illinois that
[this] duty to defend extends to cases where the complaint alleges several causes of action or theories of recovery against an insured, one of which is within the coverage of the policy while others [might] not be.
Maryland Casualty Co. v. Peppers, 64 Ill.2d 187, 355 N.E.2d 24, 28 (1976) (emphasis supplied). An insurer may not refuse the tendered defense of an action unless a comparison of the policy with the underlying complaint shows on its face that there is no potential for coverage. Weed v. Ohio Farmer’s Insurance Co., 53 Ill.App.3d 826, 11 Ill.Dec. 564, 566, 368 N.E.2d 1310, 1312 (1977). In making the comparison any ambiguous or equivocal expressions in the policy will be strictly construed against the insurer. Pioneer Insurance Co. v. Alliance Insurance Co., 374 Ill. 576, 586, 30 N.E.2d 66, 71-72 (1940). See generally 7C Appleman, Insurance Law and Practice § 4683 (1979).
Solo contends, however, that even if Federal’s refusal to provide a defense was proper under the above described duty of defense and was therefore not a breach of the agreement contained in Endorsement 1 of the policy, quoted supra, Federal may nevertheless be required to indemnify Solo for the $25,000 paid in settlement of the underlying action if, on remand, a trier of fact concludes that Solo’s actions toward Anne Willard were not “intentional” within the meaning of the policy. Solo bases this argument on the premise that because the duties of indemnity and defense contained in the insurance contract are independent covenants, the mere fact that one covenant has not been breached does not preclude an opposite conclusion with respect to the remaining covenant.
While it is true that the obligations of indemnity and defense contained in the contract are independent of each other, we are unable to agree that Federal may, absent the existence of a duty of defense regarding the EEOC claim, have any obligation of indemnity for the sums paid in settlement of that claim. This follows from the fact that under Illinois law, a duty to defend such as is embodied in this contract of insurance, is broader than a general duty to indemnify for liabilities, fees, and costs. Colton v. Swain, 527 F.2d 296, 301-302 (7th Cir. 1975) (applying Illinois law).
The defense obligation is triggered when the insured tenders the defense of an action against it which is potentially within the policy coverage. By contrast, the indemnity obligation at issue here matures only when the insured becomes obligated to pay by reason of liability imposed by law. An insurer whose policy has an assumption of defense clause will therefore frequently have an independent duty to defend actions which will not ultimately result in an obligation to indemnify, either because the insured was not adjudged liable or because the facts were resolved in such a way as to bring the matter within a policy exclusion. Conversely, litigation over the independent duty to indemnify will result only: (1) when the insurer has already defended the action under a reservation of rights, the insured has been found liable, and the insurer thereafter contests the coverage of the policy; or (2) when the policy contains no defense clause. If the broader duty to defend has not been triggered, it is because the underlying action is not potentially within the coverage of the policy, and there could be, as a practical matter, no duty to indemnify in such a situation.
Therefore, because Federal refused to assume the defense of the EEOC action, our analysis here necessarily focuses on whether that refusal was a breach of the duty of defense covenant contained in Endorsement 1. In the event it was not a breach of that covenant of the insurance contract, our inquiry is at an end. If, however, we determine that the duty of defense was violated, the applicable Illinois law holds that the insurer is estopped to deny coverage, Aetna Casualty & Surety Co. v. Coronet Insurance Co., 44 Ill.App.3d 744, 3 Ill.Dec. 371, 374, 358 N.E.2d 914, 917 (1976), and provides for the following broad measure of damages to the insured: (1) the costs of defending the suit; (2) the amount recovered from the insured, either by way of judgment or settlement; and, (3) any additional damages caused by the insurer’s breach of contract, see, e. g., J. L. Simmons Co., Inc. v. Fidelity and Casualty Co., 511 F.2d 87, 90 (7th Cir. 1975) (applying Illinois law); Weed. v. Ohio Farmer’s Insurance Company, 53 Ill.App.3d 826, 11 Ill.Dec. 564, 567, 368 N.E.2d 1310, 1313 (1977); Sims v. Illinois National Casualty Co., 43 Ill.App.2d 184, 193 N.E.2d 123, 127 (1963); see generally 7C Appleman, Insurance Law and Practice § 4683 (1979), again obviating any additional inquiry into the duty to indemnify.
Federal contends that its refusal of the tendered defense was proper because the underlying EEOC complaint against Solo included the following allegation:
Since July 2, 1965, and continuously up until the present time, Defendant Company has intentionally engaged in unlawful employment practices at its Atlanta, Georgia facility, in violation of certain provisions of Title VII. These violations include, but are not limited to, the following:
1. Failing and refusing to promote women based on sex;
2. Compensating women at a lower rate than men for substantially the same work;
3. Maintaining job classifications segregated on the basis of sex;
4. Having different terms and conditions of employment for women based on sex; and
5. Discharging women in retaliation for exercising protected rights under Title VII.
(Emphasis supplied).
Reasoning that the extent of its obligation to defend should be measured by a comparison of the policy and the underlying complaint, Federal then argues that the act of the insured which is the subject of the suit must be an “occurrence.” Because the policy defines an “occurrence” insofar as is relevant to this litigation as one which “unintentionally results in personal injury . ” (emphasis supplied), Federal therefore insists that the inclusion of the word “intentionally” in the underlying complaint negated coverage and relieved it of its duty to provide a defense. We do not agree.
While it is true that an insurance company’s obligation to defend depends upon the underlying complaint against its insured, this obligation, as noted previously, is present whenever there appears to be a potential for coverage under the policy. Colton v. Swain, 527 F.2d 296, 302 (7th Cir. 1975) (applying Illinois law); Maryland Casualty Co. v. Peppers, 64 Ill.2d 187, 355 N.E.2d 24 (1976); Weed v. Ohio Farmer’s Insurance Co., 53 Ill.App.3d 826, 11 Ill.Dec. 564, 368 N.E.2d 1310 (1977). Where, under the allegations of the pleadings against the insured, “an insured’s liability exists on one theory as well as another and one of them brings the liability within coverage, we think the insured may avail himself of the insurance protection.” United States Steel Corporation v. Hartford Accident & Indemnity Co., 511 F.2d 96, 99 (7th Cir. 1975) (emphasis supplied) (applying Illinois law). Especially since the advent of notice pleading, in a case where there is doubt as to whether a theory of recovery within the policy coverage has been pleaded in the underlying complaint, the insurer must defend, and its defense obligations will continue until such time as the claim against the insured is confined to a recovery that the policy does not cover. Carboline Company v. Home Indemnity Company, 522 F.2d 363, 366-367 (7th Cir. 1975) (analyzing Illinois law).
To hold otherwise would be to place upon the insured the burden of demonstrating in advance of the underlying litigation which of the competing theories of recovery against it was applicable for purposes of insurance, thereby frustrating one of the basic purposes of such a clause in the insurance contract — protection of the insured from the expenses of litigation. Aetna Casualty & Surety Co. v. Coronet Insurance Co., 44 Ill.App.3d 744, 3 Ill.Dec. 371, 358 N.E.2d 914 (1976).
The underlying complaint filed against Solo by the EEOC seemingly alleges a full panoply of offenses under Title VII. Although based upon a promotional claim filed by a single employee, it includes class allegations of sex based discrimination in compensation, promotional opportunities, and job placement, as well as general allegations of discrimination in terms and conditions of employment.
A Title VII plaintiff may establish a violation under either the “disparate treatment” or the “disparate impact” theory. As the Supreme Court observed in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335-36 n.15, 97 S.Ct. 1843, 1854 n.15, 52 L.Ed.2d 396 (1977):
“Disparate treatment” ... is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. .
Claims of disparate treatment may be distinguished from claims that stress “disparate impact.” The latter involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. .
Id.
In our opinion, the allegations in the underlying EEOC complaint were so general that the EEOC would in all likelihood have been permitted to proceed under either theory. An analysis of the question of whether a disparate treatment claim would have been within the coverage of the policy necessitates an examination of the burdens of proof articulated for that type of action in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973), and its progeny. In order to establish a prima facie case under the disparate treatment theory, a plaintiff is required to show the following: (1) that he or she belongs to a protected group under the statute; (2) that he or she applied and was qualified for the job or promotion for which the employer was considering applicants; (3) that despite his or her qualifications, the applicant was rejected or was not promoted; and (4) that after the plaintiff’s rejection, the employer continued to seek or consider applicants of the plaintiff’s qualifications.
In Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978), the Court defined the exact scope of the prima facie case, noting that it was not the equivalent of a finding of discrimination, but rather raises an inference that the defendant’s acts, if not otherwise explained, were more likely than not based on a consideration of impermissible factors. The burden that shifts thereafter to the employer is consequently one of articulating a legitimate, nondiscriminatory reason for its employment decision. Board of Trustees of Keene State College v. Sweeney, 439 U.S. 24, 99 S.Ct. 295, 58 L.Ed.2d 216 (1978). If the employer meets this burden, the plaintiff will then be given an opportunity to introduce evidence that the employer’s proffered justification is a mere pretext for discrimination.
What emerges from an overview of the above burdens is that proof of discriminatory motive is critical in a disparate treatment action. International Brotherhood of Teamsters v. United States, supra, 431 U.S. at 335-36 n.15, 97 S.Ct. at 1854 n.15. The establishment of a case under McDonnell Douglas is equated with proof of motive because
we know from our experience that more often than not people do not act in a totally arbitrary manner, without any underlying reasons, especially in a business setting. Thus, when all legitimate reasons for rejecting an applicant have been eliminated as possible reasons for the employer’s actions, it is more likely than not the employer, whom we generally assume acts only with some reason, based his decision on an impermissible consideration.
Furnco Construction Corp. v. Waters, supra, at 577, 98 S.Ct. at 2950.
While the concepts of motive and intent are not identical, we think in the narrow context of determining the scope of coverage under this insurance policy, there is a similarity. The policy definition of an insured occurrence would extend only to a liability incurred by reason of Solo’s unintentionally exposing women to discriminatory conditions. The extent of this coverage is therefore inconsistent with liability predicated on the disparate treatment theory since such a liability would necessarily involve a determination that Solo acted with a discriminatory motive or purpose.
We reach the opposite conclusion, however, with respect to the disparate impact theory, which is employed to analyze the validity of employment practices which are fair and neutral in form, but discriminatory in operation. The basic legal standards utilized in a disparate impact analysis were developed in Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), and amplified in Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). Proof of motive is not required. International Brotherhood of Teamsters v. United States, supra, 431 U.S. at 335-36 n.15, 97 S.Ct. at 1854 n.15.
In order to make out a prima facie case of discrimination under the disparate impact theory, the plaintiff is required to show only that the employer utilized a facially neutral criterion which resulted in selecting applicants for hire or promotion in a significantly discriminatory pattern. Once the employment standard is so shown to be discriminatory in effect, the employer then must meet the burden of showing that its standard bears a manifest relation to the job in question. If the employer can demonstrate the job relatedness of its standard, the plaintiff may then show that other selection devices without a similarly discriminatory effect will also serve the employer’s interest in maintaining an efficient workforce.
Solo contended at argument that the basis of the underlying claim against it was in fact a disparate impact claim based on its policy of requiring sales experience as a prerequisite for certain promotions. This policy, according to Solo’s summary of the EEOC’s position in the underlying action, disqualified disproportionate numbers of women, who, as a group, tended not to have the required experience.
While there is nothing in the record below to enable us to make a clear determination of whether the EEOC’s complaint was in fact aimed at such a policy, we cannot, as noted previously, hold that the EEOC complaint did not contain a potential disparate impact claim. Since disparate impact liability does not require proof of discriminatory motive, and since Federal has, moreover, conceded that the policy covers at least some types of disparate impact claims, we therefore hold that the disparate impact claim which could have been proved under the allegations of the underlying complaint was a claim potentially within the coverage of the policy. Consequently, under Illinois law, Federal has breached its duty to defend its insured in the action. See generally Maryland Casualty Co. v. Peppers, supra, 355 N.E.2d at 28.
The final issue to be considered with respect to the EEOC claim is whether our construction of the policy to include coverage of disparate impact liability would, as Federal contends, render the insurance contract violative of the public policy against employment discrimination embodied in Title VII. It is well settled that “[a] contract of insurance to indemnify a person for damages resulting from his own intentional misconduct is void as against public policy and the courts will not construe a contract to provide such coverage.” Industrial Sugars, Inc. v. Standard Accident Insurance Co., 338 F.2d 673, 676 (7th Cir. 1964). This rule is based on the simple principle long ago stated by Judge Cardozo, that “no one shall be permitted to take advantage of his own wrong. Messer-smith v. American Fidelity Co., 232 N.Y. 161, 133 N.E. 432 (1921). Placing a limitation on the clear meaning of an insurance contract due to policy considerations, is, however, a restraint on the rights of private parties to fashion their own contract, Union Camp Corp. v. Continental Casualty Co., 452 F.Supp. 565, 568 (S.D.Ga.1978), and is a step which courts have taken only where contracts were argued to extend coverage to the knowledgeable and intentional, or the criminal wrongdoer. Hartford Life Insurance Co. v. Title Guarantee Co., 520 F.2d 1170 (D.C.Cir.1975); 1 Couch on Insurance 2d § 1.36 (1959 & Supp.1978).
Because we have construed the policy to exclude coverage of disparate treatment liabilities, we do not consider whether the degree of motive which must be proved in that type of action would be equivalent to a knowledgeable and intentional wrong such as would void policy provisions purporting to cover those claims.
With respect to the coverage of disparate impact liabilities, there is clearly no basis for voiding or limiting the contract. An insured may incur liability or become involved in litigation under that theory as a result of its utilization of any of a variety of seemingly neutral selection criteria. We note our agreement with the opinion of the Court of Appeals for the Sixth Circuit in L’Orange v. Medical Protective Company, 394 F.2d 57, 60 (6th Cir. 1968), where that court, interpreting Ohio law, observed that “the violation of public policy is measured by the tendency of the contract to injure the public good rather than by actual injury under the particular circumstances.”
We do not think that allowing an employer to insure itself against losses incurred by reason of disparate impact liabilities will tend in any way to injure the public good, which we equate here with that equality of employment opportunity mandated by Title VII. To the contrary, the fact of insurance may be helpful toward achieving the desirable goal of voluntary compliance with the Act. The statistical proofs in disparate impact actions, most particularly those involving employment testing, have become increasingly complex and employers now often retain batteries of experts to validate their selection criteria. Such complex analyses of employment standards, while apparently necessary in order to ensure that an employer’s policies do not needlessly place a stumbling block in the way of women or minorities, may well become, as a practical matter, beyond the financial capabilities of all but the largest employers. The involvement of insurance in the field might, however, ease the burden on smaller employers by making claim prevention services available on a cost effective basis to help employers evaluate their employment standards. Workmen’s compensation insurers have, by way of analogy, no doubt helped prevent numerous employee injuries, and it is not undesirable, nor inconceivable, that discrimination insurers might aid in preventing the injury of discrimination as well.
Because we have held that Federal breached its duty to defend its insured in an action which was potentially within the coverage of its policy, and because there is no public policy reason for limiting the contract, Solo is entitled under Illinois law to damages in the amount of the costs and fees involved in defending the action, and the sums paid in settlement of the claim, less the policy deductible.
B. The GSA Review
Solo also seeks a declaration that it is entitled to liave Federal provide a defense with respect to the allegations of sex discrimination made by the GSA in its compliance review. It additionally seeks indemnity for the $3,750 in legal fees and costs already expended during the review, and further seeks a declaratory judgment that any sums it becomes obligated to pay as backpay to female employees in the facility which was the subject of the GSA review will be within the indemnity coverage of the policy.
Dealing with these contentions in order, our review of the record does not indicate that Federal’s defense obligations have been triggered by the events to date surrounding the compliance review. Our determination rests upon the fact that the only “claim” which has so far been made against Solo is an administrative proposal that Solo pay some $266,667 in allegedly due backpay as a basis for conciliation. Solo, has, however, refused to conciliate upon this basis. Moreover, this excerpt from a letter from Solo to Federal dated May 19, 1977, is itself illustrative of the remote and indeed speculative nature of any claims which might be made against Solo:
Solo Cup Company denies that it is guilty of any such [backpay] deficiency because there are a number of available defenses to the allegation and in any event believes that the amount claimed is greatly exaggerated. As a result of refusing to conciliate this matter, it is anticipated that some time in the future there will be a hearing with respect to Solo’s right to continue as a government contractor and there might be an. action filed to seek backpay.
(Emphasis supplied.)
Because we have held that Federal’s broad duty of defense has not yet been triggered, we must examine the question of whether Solo might be entitled to reimbursement of the $3,750 of fees and costs expended to date in conjunction with the review under the indemnity provisions of the policy. Because there have been no formal proceedings against Solo, and therefore no “liability imposed upon the Insured by law” as required by Paragraph 4 of the indemnity coverage, we hold that it is not so entitled at this time.
Finally, we are in full agreement with the district court that the question of whether Solo would be entitled to indemnity for sums paid to female employees in any actions which might be brought either to debar Solo as a federal contractor or to seek backpay for alleged discriminatees is not ripe for adjudication. The Declaratory Judgment Act, 28 U.S.C. § 2201, provides for a remedy only in cases of “actual controversy.” The mere possibility that proceedings might be commenced against an insured regarding an act of the insured’s as to which the insurer might contest coverage, is not sufficient to create a controversy within the meaning of either the Declaratory Judgment Act or Article III of the Constitution.
The district court erred, however, in granting the insurer’s motion for summary judgment as to the GSA related allegations. The appropriate remedy where an action is found not to constitute a controversy is not judgment but dismissal. Fed. R.Civ.P. 12(h)(3).
Reversed and Remanded, for entry of a judgment on Count I and an order of dismissal on Count II consistent with this opinion. The judgment of this court shall include costs to the appellant.
. Solo had no underlying insurance and Federal’s liability, if found to exist, could be subject to a deductible of $10,000.
. No issue is raised regarding the timeliness of the notice to Federal.
. The proper course of action for an insurer who disputes coverage, but nevertheless has an obligation to defend an action is set forth in> Maryland Casualty Co. v. Peppers, 64 Ill.2d 187, 355 N.E.2d 24 (1976). The insurer should either seek a declaration of its rights in an independent action, or should defend under a reservation of rights, which it may do by assuming the defense, or, if necessary to avoid a conflict of interest, by means of independent counsel retained to represent the interests of the insured.
. Federal has not raised an issue as to the adequacy of the tender.
. The EEOC complaint was filed before the decision in EEOC v. D. H. Holmes Co., Ltd., 556 F.2d 787 (5th Cir. 1977), cert. denied, 436 U.S. 962, 98 S.Ct. 3082, 57 L.Ed.2d 1129 (1978). In that case, the Fifth Circuit held that when the EEOC alleges class discrimination and seeks relief for “those persons adversely affected,” the suit is a class action and the EEOC must comply with the requirements of Rule 23.
. Although it might seem that Federal’s argument carried to its logical extreme would result in its purported coverage of “discrimination” as being without any real meaning, Federal argues otherwise, pointing out that there are instances of vicarious liability imposed by Title VII, caused by the acts of others, which liability is therefore unintentional as to the insured. We regard this approach as so narrow as to leave little real meaning to the purported coverage.
. In the GSA matter there are no adjudicatory proceedings taking place in any forum; therefore we leave for another day the question of whether the duty to defend imposed by the provisions of the policy is necessarily confined to judicial proceedings. We do note, however, that the duty to defend in Endorsement 1 obligates the insurer to “defend any suit against the insured.” The indemnity provisions of the policy, by contrast, obligate the insurer to indemnify Solo for all sums paid by reason of liability imposed “by law.” In light of this language in the indemnity provisions, we think that the duty to defend “suits” might in some circumstances be triggered by adjudicatory proceedings before an administrative body. This conclusion follows from the fact that under Illinois law, the duty to defend, while independent of the duty to indemnify, is the broader of the two. Further, the word “suit” contained in the defense provision is ambiguous, see, e. g., Webster’s New Unabridged International Dictionary (2d ed.) (defining “to sue” as “to seek justice or right ... by legal redress”), and must therefore be construed liberally in favor of the insured. J. L. Simmons Co., Inc. v. Fidelity & Cas. Co., 511 F.2d 87, 90 (7th Cir. 1975).
Question: What is the nature of the first listed appellant?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_appnatpr
|
1
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "natural persons". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Freddie DAVIS, Petitioner-Appellee, Cross-Appellant, v. Ralph KEMP, Warden, Georgia Diagnostic and Classification Center, Respondent-Appellant, Cross-Appellee.
No. 83-8384.
United States Court of Appeals, Eleventh Circuit.
Sept. 30, 1987.
Rehearing and Rehearing En Banc Denied Nov. 25,1987.
Mary Beth Westmoreland, Asst. Atty. Gen., Atlanta, Ga., for respondent-appellant, cross-appellee.
Joseph M. Nursey, Millard C. Farmer, Atlanta, Ga., for petitioner-appellee, cross-appellant.
Before HILL and KRAVITCH, Circuit Judges, and MORGAN, Senior Circuit Judge.
HILL, Circuit Judge:
Ralph Kemp, Warden of the Georgia Diagnostic Center, appeals to this court from an order of the district court granting Freddie Davis’ petition for a writ of habeas corpus, and thus prohibiting his execution unless the state holds a resentencing hearing within 180 days. Davis has filed a cross-appeal from the order of the district court denying relief as to the other grounds set forth in his petition. We affirm the order of the district court denying relief as to the grounds raised by Davis in his cross-appeal and reverse the order granting relief on the grounds addressed by the state’s appeal.
Davis was indicted in Meriwether County, Georgia, on charges of murder and rape; at his trial in March 1977, the jury found him guilty of both crimes. At his sentencing hearing, the jury found an aggravating circumstance, see O.C.G.A. § 17-10-30(b)(2), and the judge sentenced Davis to death for the murder and life imprisonment for the rape. Davis appealed his convictions and sentence to the Georgia Supreme Court. In February 1978, that Court upheld Davis’ convictions but vacated his death sentence. See Davis v. State, 240 Ga. 763, 243 S.E.2d 12 (1978). At Davis’ second sentencing hearing in May 1978, the jury found two statutory aggravating circumstances, see O.C.G.A. § 17-10-30(b)(2) & (b)(7), and the judge sentenced Davis to death. Davis appealed to the Georgia Supreme Court, which affirmed the death sentence. See Davis v. State, 242 Ga. 901, 252 S.E.2d 443 (1979). The United States Supreme Court vacated the second death sentence and remanded the case to the Georgia Court for reconsideration in light of Godfrey v. Georgia, 446 U.S. 420, 100 S.Ct. 1759, 64 L.Ed.2d 398 (1980) . See Davis v. Georgia, 446 U.S. 961, 100 S.Ct. 2934, 64 L.Ed.2d 819 (1980). The Georgia Court reinstated the death sentence, see Davis v. State, 246 Ga. 432, 271 S.E.2d 828 (1980), and the Supreme Court denied certiorari. See Davis v. Georgia, 451 U.S. 921,101 S.Ct. 2000, 68 L.Ed.2d 312 (1981) . Davis then filed a petition for a writ of habeas corpus in state superior court. The state court denied this petition on February 5, 1982, and the Georgia Supreme Court denied Davis’ application for a certificate of probable cause on March 24, 1982. The United States Supreme Court again denied certiorari. See Davis v. Georgia, 459 U.S. 891, 103 S.Ct. 189, 74 L.Ed.2d 153 (1982).
On December 15,1982, Davis filed a petition for a writ of habeas corpus in federal district court. The court denied this petition on December 20, 1982. Davis, with new counsel, filed various pleadings with the district court, which he characterized as amended petitions, in an effort to raise new claims. Although the district court found the petitions to be successive and an abuse of the writ, on December 23, 1982, the court agreed to reconsider the case. On April 8, 1983, the court granted Davis the above-described partial relief.
This appeal was held in abeyance pending four en banc opinions affecting the outcome of this case. With the Supreme Court’s denial of certiorari on March 2, 1987 in Tucker v. Kemp, 762 F.2d 1480 (11th Cir.1985) (en banc), vacated, 474 U.S. 1001, 106 S.Ct. 517, 88 L.Ed.2d 452 (1985), on remand, 802 F.2d 1293 (llth Cir.1986), cert, denied, — U.S.-, 107 S.Ct. 1359, 94 L.Ed.2d 529 (1987), the appeals in these four cases became final. Accordingly, we proceed to analyze the issues set forth in Davis’ petition.
I
Davis raised three of his claims on appeal for the first time in his second federal habeas petition. The state contends that the district court improperly considered Davis’ second petition after finding it to be a successive petition and an abuse of the writ. We hold that, under the controlling case law, the district judge did not abuse his discretion in considering the issues raised in the successive petition in this case.
As the Supreme Court has stated, the district courts are responsible for
the just and sound administration of the federal collateral remedies, and theirs must be the judgment as to whether a . second or successive application shall be denied without consideration of the merits. Even as to such an application, the federal judge clearly has the power— and, if the ends of justice demand, the duty — to reach the merits.
Sanders v. United States, 373 U.S. 1, 18-19, 83 S.Ct. 1068, 1078-79, 10 L.Ed.2d 148 (1963); see also Kuhlmann v. Wilson, 477 U.S. 436, 106 S.Ct. 2616, 2625, 91 L.Ed.2d 364 (1986) (“the permissive language of § 2244(b) gives federal courts discretion to entertain successive petitions under some circumstances”); Potts v. Zant, 638 F.2d 727, 741 (5th Cir. Unit B 1981). In his order, the district judge specifically cited Sanders and Potts. We thus conclude that, despite his decision that Davis had abused the writ, the district judge relied on the proper grounds in exercising his discretion, concluding that the “ends of justice” justified considering Davis’ amended petition. See Sanders, 373 U.S. at 15, 83 S.Ct. at 1077.
II
The district court granted the writ because it found the closing argument of the prosecutor at Davis’ sentencing hearing unconstitutional under our decision in Hance v. Zant, 696 F.2d 940 (11th Cir.1983). In Hance, the court found unconstitutional arguments made by the prosecutor which were similar to the arguments delivered in this case. The decision in Hance, however, has been largely overruled. Brooks v. Kemp, 762 F.2d 1383, 1399 (11th Cir.1985) (en banc), vacated on other grounds, — U.S.-, 106 S.Ct. 3325, 92 L.Ed.2d 732 (1986); see Drake v. Kemp, 762 F.2d 1449 (11th Cir.1985) (en banc), cert, denied, — U.S.-, 106 S.Ct. 3333, 92 L.Ed.2d 739 (1986); Tucker v. Kemp, 762 F.2d 1480 (11th Cir.1985) (en banc), vacated, 474 U.S. 1001, 106 S.Ct. 517, 88 L.Ed.2d 452 (1985), on remand, 802 F.2d 1293 (11th Cir.1986), cert, denied, — U.S.-, 107 S.Ct. 1359, 94 L.Ed.2d 529 (1987); Tucker v. Kemp, 762 F.2d 1496 (11th Cir.1985) (en banc).
Generally the court engages in a two step process in determining whether a habeas petitioner is entitled to relief based upon a prosecutor’s arguments. First, we consider whether the prosecutor’s arguments were improper. Second, we consider whether any arguments found improper were so prejudicial as to render the trial fundamentally unfair. As we noted in Brooks, 762 F.2d at 1400, “it is not our duty to ask whether a particular remark was unfair; we are concerned with whether it rendered the entire trial unfair.” The Supreme Court has recently reaffirmed the standard to be employed in reviewing a prosecutor’s argument:
The relevant question is whether the prosecutors’ comments “so infected the trial with unfairness as to make the re-suiting conviction a denial of due process.” Donnelly v. De Christoforo, 416 U.S. 637 [94 S.Ct. 1868, 40 L.Ed.2d 431] (1974). Moreover, the appropriate standard of review for such a claim on writ of habeas corpus is “the narrow one of due process, and not the broad exercise of supervisory power.” Id. at 642, 94 S.Ct. at 1871.
Darden v. Wainwright, 477 U.S. 187, 106 S.Ct. 2464, 91 L.Ed.2d 144 (1986). Applying this standard, we conclude that the prosecutor’s closing arguments did not render Davis’ trial fundamentally unfair.
Davis primarily attacks six portions of the prosecutor’s arguments which he considers unconstitutional. During the sentencing phase, the prosecutor analogized the role of the jury and the role of soldiers fighting for their country:
I know it’s difficult and an unpleasant thing. Nobody would like to recommend the death penalty for anybody else, but people, unfortunately, are faced with difficult times, having to do difficult things. Every one who goes into the armed services has a difficult duty. Oftentimes these men have to go into battle and fight and get killed although they might be opposed to the practice of killing. But, in order to protect our country and preserve it, keep it where it is and keep it free, they must occasionally go into battle and kill people. It’s the same principal that applies here, and I submit, Freddie Davis and people like him are just as much as an enemy of this country as soldiers who have fought against this country in war. In fact, even more because these soldiers are fighting for their own country.
Freddie Davis has no such motives. His motives are self-motivations, greed, lust or what have you. Let’s not feel sorry for Freddie Davis. There has been no evidence whatsoever presented by Freddie Davis to repute [sic] or dispute or rebute [sic] any evidence that we have submitted. The evidence that we have submitted must be taken as true because you have no other evidence presented to you. That’s it.
In Brooks, we found improper an argument that was similar in some respects to the argument quoted above but was in other respects more egregious. We noted that “the analogy of the death penalty to killing in a war was appropriate insofar as it implied that imposing death, while difficult, is at times sanctioned, by the state because of compelling reasons (national security or deterring crime).” 762 F.2d at 1412. We found the particular analogy drawn in Brooks to be improper, as it “undermine[d] the crucial discretionary element required by the Eighth Amendment.” Id. at 1413. In that case, however, “[t]he improper aspect of the argument was the suggestion that the jurors should forego an individualized consideration of Brooks’ case and instead choose execution because he was part of the broad ‘criminal element’ terrorizing American society.” Id. at 1414. The excerpt quoted above included no such suggestion. Instead, the prosecutor emphasized the evidence in this particular case and the duty of the jury to impose a sentence of death if they deemed it appropriate under the particular circumstances of the crime Davis committed. The prosecutor thus avoided the argument held improper in Brooks.
Also challenged is the prosecutor’s argument concerning the deterrent value of the death penalty:
We do know this, that in the last 10 or 12 years, since we haven’t had but one death penalty in the whole United States, violent crimes have increase [sic] tremendously. They are running rampant in this country. You cannot pick up the newspaper, listen to the television, or radio, read a magazine or anything about the news without reading about some vile, horrible, unspeakable crime. These crimes are happening in much more frequency now than they did while we were imposing the death penalty on people who committed these crimes. That’s just the facts of life. We do know that this is happening.
This argument was not improper. Arguments by the prosecutor that the death penalty serves as a deterrent are proper. Brooks, 762 F.2d at 1407 (“In deciding whether to impose the death penalty in a particular case, it is appropriate for a jury to consider whether or not the general deterrence purpose of the statute is served thereby.”); Drake, 762 F.2d at 1449; Tucker, 762 F.2d at 1484; Tucker, 762 F.2d at 1505; Collins v. Francis, 728 F.2d 1322, 1339 (11th Cir.1984). One of the stronger arguments relied upon by defense attorneys during the sentencing phase of a death case is that nothing would be served by taking the defendant’s life. The prosecutor is permitted to rebut such an argument. The constitution does not require one-sideness in favor of the defendant.
Davis contends the prosecutor’s arguments are presumably based on studies not in evidence. In Brooks, the prosecutor was permitted to argue that the increasing crime rate had been produced by the state’s failure to have executed anyone in recent years. Reference to the increasing crime rate was permissible without statistical proof, because such information was within the common knowledge of jurors. Implicit within the state legislature’s decision to enact a death penalty statute is the determination that the death penalty serves valid purposes of deterrence and retribution. Thus, the court in Brooks concluded that: “[t]he prosecutor need not adduce evidence ... to prove the link between death and deterrence. An argument ... urging jurors to consider the deterrent effect of the penalty is not improper.” Brooks, 762 F.2d at 1409.
Retribution is also a permissible factor which the jury may consider in imposing death. Brooks, 762 F.2d at 1407; Tucker, 762 F.2d at 1484; Tucker, 762 F.2d at 1505. The prosecutor’s arguments seeking to justify the execution of Freddie Davis based upon society's legitimate interest of purging itself of this wrong was a permissible argument. The prosecutor made the following argument:
But, by feeling sorry for him, we neglect and overlook another aspect of the case. We completely ignore and neglect and overlook what happened to Miss Coe. What happened to her? For 35 or 40 minutes these people were in her house in which she was undergoing tortures that we can’t imagine. We can’t imagine what happened to her. No one within his wildest dreams can imagine what she went through. This type of sympathy directed toward Freddie Davis, ladies and gentlemen is false sympathy because it only looks at one side of the coin. One side of the story. To ignore Frances Coe and feel only for this defendant, I submit, would be a disgrace and an injustice and an outrage. That people can commit crimes like this in this country and not receive the punishment that they deserve is a disgrace and an outrage. Something this whole country has to be ashamed of, and ladies and gentlemen, I submit one of the main reasons that we have so many crimes like this in this country and we have them because of sympathy on the part of jurors toward people who commit the crime.
This argument was merely an effective means of emphasizing the purposes of retribution and deterrence served by this statute. The prosecutor also invoked both general and specific deterrence again in his conclusion:
The death penalty is called for. Ask yourselves this question, how would you feel living in this community if you looked out of your window one night and saw Freddie Davis walking down the street coming up toward your house. If that wouldn’t put a feeling of cold terror in your heart, what would?
One thing and one thing only will stop or reduce this type of crime from happening is that jurors must do their duty and stand up and be counted and tell Freddie Davis and people like him that they have had enough. That we are going to execute you if you participate in crimes like this. If you don't do it, why should they ever stop doing it? Why should they? If you are not willing to impose the death penalty in this case or cases like this, what will ever stop these people from committing these types of horrible, unspeakable crimes.
In Jurek v. Texas, 428 U.S. 262, 96 S.Ct. 2950, 49 L.Ed.2d 929 (1976), the Supreme Court held that the future dangerousness of a defendant is a proper consideration in imposing death. See Tucker, 762 F.2d at 1507; Bowen v. Kemp, 769 F.2d 672, 679 (11th Cir.1985). In the above quoted excerpt, the prosecutor dramatically illustrated this future dangerousness. In Brooks, the prosecutor brought this very matter home to the jury by asking, “Who’s daughter will be killed next?” We found such an argument to be constitutional, concluding that: “A legitimate future dangerousness argument is not rendered improper merely because the prosecutor refers to possible victims.” Brooks, 762 F.2d at 1412. The argument made in this case is no more emotion laden than the imagery created by the prosecutor in Brooks.
Davis also attacks two portions of the prosecutor’s arguments which he argues tend to lessen the jury’s role in the sentencing process. The prosecutor argued:
This is an important task. It’s a task that only the jury can decide. This is a task, a decision, that is so important that only the people, the people themselves, can decide this. The people decide this in the person of your twelve citizens picked from this county, twelve upstanding, intelligent citizens, as the law requires and decide what you think should be done. Punishment can’t be decided by the Sheriff. You can’t blame him if the person doesn’t get the electric chair. You can’t blame the judge if he doesn’t give him the electric chair, you can’t blame the District Attorney or the Governor or the GBI. The Governor doesn’t sentence, nor the State Legislature or the State Appeal Court or anybody else. This decision, what a sentence will be, is to be decided by a jury and only be decided by you, by this jury.
A similar argument was made toward the conclusion of the prosecutor’s argument:
What this case comes down to is a question of duty. You must do your duty as you see fit as the citizens of this country. And I — this is a difficult thing to do at times. Everyone else has had a duty in this case. The other people have done their duty as well as they saw fit. The citizens who found Miss Coe, found her body, they did their duty by bringing this to light. The officers, GBI, the Sheriff's office, Sheriff Branch, Mr. Bert Davis, they did their duty as well as it could be done, and we are very fortunate, ladies and gentlemen, to have people like this working for you. I think you realize that. All the witnesses who testified in the case, officers, or people reported the crime or Crime Lab — the Crime Lab did its duty and they did their duty by performing the tests that they did and coming and testifying about it. The Grand Jury did its duty by returning an indictment. The Judge did his duty deciding on the legal points that came up and with intelligence. The juries — first jury did its duty by finding this one guilty of the offenses that he committed. I have attempted to do my duty by trying to bring the truth out to you and let you know what happened. It’s your duty and nobody else’s you can’t delegate it to anyone else. No one else but you and your duty is clear, and to not find — not recommend the death penalty is to leave your duty undone and only halfway complete this case.
These arguments bear some resemblance to an argument made by the prosecutor in Tucker v. Kemp, 762 F.2d 1480 (11th Cir. 1985):
[The defense attorney will] mention that, well, can you sleep well if this man is executed? Won’t it bother you if you ever read about it or hear about it whenever it happens? But I for one want to tell you that you are not the ones who did it if he is executed. It does not rest on your shoulders, ladies and gentlemen. Policemen did their duty and they went out and made the case. The grand jury down there did its duty and it indicted him and charged him with these horrible offenses. The district attorney’s office prosecuted the case, located the witnesses, and brought them in. The judge, the court came in and presided at the trial. And ladies and gentlemen, you are the last link in this thing, and if this man suffers the death penalty it’s no more up to you than it is to anybody else, the grand jury or the police, or the district attorney’s office. All of us are coming in and doing our duty.
In Tucker, the Court concluded that such an argument was improper because it “suggested] that the jury is only the last link in a long decision” to impose death and therefore trivializes the jury’s importance. Tucker, 762 F.2d at 1485-86.
In Brooks v. Kemp, the en banc court also considered a prosecutor’s argument which is remarkably similar to the argument made in the present case:
Now I’m sure another question that might be going through your mind at this time is, when I get back to that jury room, and we have to vote, and I vote to take somebody’s life, can I do it? I know it’s rough, it would be hard for me to do. Can I take somebody’s life? Well the truth, you’re not pulling the switch in the electric chair; the police who investigated this case and who apprehended William Brooks, they’re not taking his life; the Recorder’s Court Judge who heard the evidence in the preliminary hearing, are you going to say he’s responsible for taking his life? Of course not. How about the Grand Jury who listened to the evidence and indicted him for murder; are the Grand Jurors responsible for his life, can you say they’re about to take his life? Of course not. How about me and my staff, we put the case together and we prosecuted him, and we’re here now asking you to bring back the death penalty, do we feel responsible? I don’t. I don’t think anybody in my office does. How about the man, if he’s electrocuted, who actually pulls the switch, is he responsible for taking his life? Of course not. The person who is responsible for his life is William Brooks himself, and if the switch is pulled and he’s put to death, he pulled the switch the morning that he was walking along Saint Mary’s Road when he put the gun in the back of Carol Jeannine Galloway and kidnapped her, that's when he took his own life. He’s a grown man, and he knew what he was doing.
This argument was found to be proper because it did not minimize the role of the jury as the prosecutor had sought to do in Tucker, rather the argument emphasized the responsibility of the jury. In the present case, the prosecutor’s arguments are more closely analogous to the argument made in Brooks rather than the argument used by the prosecutor in Tucker. Here, the jury was instructed as to the importance of its task. The prosecutor informed the jury that they alone could determine the appropriate sentence and that this task could not be delegated.
In Dutton v. Brown, 788 F.2d 669, 675 (10th Cir.1986) the United States Court of Appeals for the Tenth Circuit considered a prosecutor’s argument which informed the jury that they were not “functioning as individuals” but functioning as part of the legal system in the same manner that the judge and district attorney performed their roles within this system. The court held that such an argument did not diminish the jury’s responsibility:
[T]he statement of the prosecutor was not constitutionally impermissible. The statement was not designed to, nor did it, suggest to the jury that it was not ultimately responsible for deciding [the defendant’s] punishment. The prosecutor merely underscored that the jury was part of the whole system of justice, and within that system it had a grave responsibility.
The same must be said concerning the arguments delivered in this case. It certainly was not improper for the prosecutor to argue that the jury should return a verdict of death in this particular case. Accordingly, the argument by the prosecutor in this case was proper.
Finally, even if we were to find the prosecutor’s argument to be improper, Davis’ sentencing proceeding was not rendered fundamentally unfair. In Tucker v. Kemp, 762 F.2d 1480 (11th Cir.1985), the court concluded that the prosecutor’s “last link” argument was improper but proceeded to find the argument was not so egregious as to create a constitutional error. The decision in Tucker, however, was vacated and remanded by the Supreme Court in light of the Supreme Court’s subsequent decision in Caldwell v. Mississippi, 472 U.S. 320, 105 5. Ct. 2633, 86 L.Ed.2d 231 (1985). In Caldwell, the court reversed a death sentence where the jury was informed that a sentence of death is not final and the sentence would be subject to automatic review by the State Supreme Court. In so ruling, the Court, per Justice Marshall, wrote:
In this case, the state sought to minimize the jury’s sense of responsibility for determining the appropriateness of death. Because we cannot say that this effort had no effect on the sentencing decision, that decision does not meet the standard of reliability that the Eight Amendment requires.
Id., 105 S.Ct. at 2646. On remand, the Tucker court concluded that its previous holding was consistent with Caldwell. Tucker v. Kemp, 802 F.2d 1293 (11th Cir. 1986) (en banc), cert, denied, — U.S.-, 107 S.Ct. 1359, 94 L.Ed.2d 529 (1987). The court noted that “[vjiewing the entire sentencing proceeding, there can be little doubt that the jury understood it had the sole responsibility to determine the sentence to be received by petitioner.” Id. at 1296; see also Coleman v. Brown, 802 F.2d 1227, 1238 (10th Cir.1986) (“[W]e do not find that this ‘last link’ remark made during the guilt stage of the trial — even taken together with the prosecutor’s persistent attempts to evoke sympathy for [the] victims and his comments on matters not in evidence — rose to the level of constitutional error.”). In the present case, the prosecutor’s closing arguments repeatedly emphasized the role played by the jury. The prosecutor began by informing the jury that only they could impose death. Later in his argument, the prosecutor commented:
If you think that the aggravated circumstances are there, but you think he should get life, then, that’s your prerogative and you can give him life. It’s totally your decision.
Defense counsel began his arguments by commenting upon the “very awesome responsibility” to which the prosecutor had referred. Furthermore, the judge informed the jury it had the discretion of imposing life even if the statutory aggravating factors were proven beyond a reasonable doubt. In light of these circumstances, we conclude that “the jury was fully apprised of and appreciated the decision that it alone had to make — whether to impose a sentence of death or one of life imprisonment.” Tucker, 802 F.2d at 1297. The sentencing proceeding was not fundamentally unfair.
Ill
Davis argues that, given the facts and procedural posture of his case, he should not have been put on trial again for his life. He contends that the evidence produced at his guilt/innocence trial failed to demonstrate beyond a reasonable doubt that he committed the offense of rape. At Davis’ first sentencing hearing, the state relied on only the subsection (b)(2) aggravating circumstance — murder committed in connection with the rape. Thus, Davis argues that the state could not resentence him to death after his first sentencing hearing because, given the lack of evidence to prove the rape, the double jeopardy clause bars placing him again on trial for his life. See Bullington v. Missouri, 451 U.S. 430, 101 S.Ct. 1852, 68 L.Ed.2d 270 (1981). We will consider the constitutional validity of both his rape conviction and his resentencing together.
When a habeas petitioner raises a sufficiency of the evidence claim, “the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979). At trial, the state produced evidence that the victim had been forcibly assaulted around the vaginal area. Although the medical examiner testified that he found no sperm and only trace elements of seminal fluid, the position of the victim’s body — sweater open, slip pulled up, pantyhose and panties pulled down — was entirely consistent with the jury’s conclusion that a rape occurred. Davis argues that the injury could have been accomplished with a foreign object such as a stick. Although this may be true, a reasonable juror could have found beyond a reasonable doubt that the victim was raped.
Davis argues that, although a juror could conclude that the victim was raped, the state introduced no evidence tending to show that Davis, as opposed to his co-defendant Spraggins (who was tried separately), committed the crime. We agree that the state failed to exclude all doubt that Davis, as a principal, committed the rape himself; however, the evidence clearly placed him in the victim’s house at the time of the crime. Although both Davis and Spraggins testified that the victim was not raped (assertions controverted by the evidence), Spraggins testified that Davis was not only present during the crime but that Davis instructed Spraggins as to how next to torture and kill the victim. Davis had a cut on his hand; and blood matching Davis’ blood type, but not Spraggins’, was found in the victim
Question: What is the total number of appellants in the case that fall into the category "natural persons"? Answer with a number.
Answer:
|
songer_r_nonp
|
99
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "groups and associations". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
James DELANEY and Helen Delaney, t/a 290 Madison Corporation, 290 Madison Corporation, a New Jersey Corporation, and James Delaney and Helen Delaney v. CAPONE, Carmine E., James J. Brown, Raymond M. Codey, Anthony Della Salla, Ernest Monfiletto, Patricia Juliano, Benjamin F. Jones, Michael Marucci, Joel L. Shain, Quincy Lucarello, Past and Present Commissioners and Councilmembers of the City of Orange; Edward Ferrari, Beverly Savage, Marion Stewart, Ralph Perrella, Kenneth Condon, Frank M. Pannucci, Jr., Sean McCarthy, R. Frank Curry, Arnold Reiter, Stanley Robinson, Past and Present Members of the Rent Leveling Board of the City of Orange; Essex County Legal Services Corporation, and John Atlas, 290 Madison Corporation and James Delaney and Helen Delaney, Appellants in 80-1776, Edward Ferrari, Beverly Savage, Marion Stewart, Ralph Perrella, Kenneth Condon, Frank M. Pannucci, Jr., Sean McCarthy, R. Frank Curry, Arnold Reiter, Stanley Robinson, Past and Present Members of the Rent Leveling Board of the City of Orange, Appellants in 80-1777, Carmine E. Capone, James J. Brown, Raymond M. Codey, Anthony Della Salla, Ernest Monfiletto, Patricia Juliano, Benjamin F. Jones, Michael Marucci, Joel L. Shain, Quincy Lucarello, Past and Present Members of the City of Orange Board of Commissioners and Councilmembers, Appellants in 80-1778.
Nos. 80-1776 to 80-1778.
United States Court of Appeals, Third Circuit.
Argued Jan. 20, 1981.
Decided Feb. 27, 1981.
Anthony M. Mahoney (argued), and Dennis M. Mahoney, Mahoney & Mahoney, Westfield, N. J., for appellants in No. 80-1776.
Alfonso C. Viscione (argued), Orange, N. J., for appellants in No. 80-1777.
Francis J. Dooley (argued), Orange, N. J., for appellants in No. 80-1778.
Before GIBBONS, VAN DUSEN and WEIS, Circuit Judges.
OPINION OF THE COURT
PER CURIAM:
Alleging that unconstitutional actions of the defendant city officials caused the loss of an apartment building through foreclosure, the plaintiffs brought suit under 42 U.S.C. § 1983 (1976). Their principal contention was that the income from the building was reduced, and the building itself eventually lost, through the actions of a rent leveling board created by a city ordinance. Inverse condemnation challenges to the constitutionality of the rent control regulation in the New Jersey state courts were unsuccessful, and the plaintiff’s building was finally sold in a mortgage foreclosure proceeding.
After a bench trial, the district court found that res judicata barred consideration of the federal claim, since it was indistinguishable from the prior state actions. The court further found that even if res judicata was not dispositive, the plaintiffs had failed to establish that the loss of the building was proximately caused by the regulatory acts of the city officials. Although rent control reduced the income from the property, the court found the plaintiffs had chosen to maintain a thin equity in the building and did not meet the mortgage payments. In addition, the court concluded that the proceedings before the board comported with due process and that there was adequate cause to support the board’s orders. Moreover, the court found that the defendant officials had established their claim to qualified immunity.
The plaintiffs have appealed from the judgment of the district court, and the defendants have cross-appealed the failure of the district court to award them costs as prevailing parties.
We have reviewed the plaintiffs’ briefs and considered the contentions they raised at oral argument. We conclude that the district court’s findings of fact are not clearly erroneous, and we perceive no reversible error in its rulings of law. Accordingly, the judgment in favor of the defendants will be affirmed.
The district court directed that “each party to the suit is to bear its own costs,” but did not disclose its reasons for that action. Normally costs are allowed as a matter of course to the prevailing party, although the court may direct otherwise. See Fed.R.Civ.P. 54(d). In ADM Corp. v. Speedmaster Packaging Corp., 525 F.2d 662, 664-65 (3d Cir. 1975), we said that when the district court determines that a prevailing party is not entitled to costs, there should be an explanation entered on the record. See also Samuel v. University of Pittsburgh, 538 F.2d 991 (3d Cir. 1976).
Although the decision to deny costs is largely a matter of discretion, an articulation of the basis for the order is necessary for purposes of appellate review. Of course, we express no view as to whether costs should be awarded in this case.
Accordingly, the case will be remanded for further proceedings consistent with this opinion.
Question: What is the total number of respondents in the case that fall into the category "groups and associations"? Answer with a number.
Answer:
|
songer_appel1_1_2
|
B
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "private business (including criminal enterprises)". Your task is to classify the scope of this business into one of the following categories: "local" (individual or family owned business, scope limited to single community; generally proprietors, who are not incorporated); "neither local nor national" (e.g., an electrical power company whose operations cover one-third of the state); "national or multi-national" (assume that insurance companies and railroads are national in scope); and "not ascertained".
SOUTH SUBURBAN SAFEWAY LINES, INC., Plaintiff-Appellant, v. The CITY OF CHICAGO, Chicago Transit Authority, et al., Defendants-Appellees.
No. 17179.
United States Court of Appeals Seventh Circuit.
Oct. 6, 1969.
Harold M. Olsen, Olsen, Cantrill & Miller, Springfield, Ill., Brimson Grow, Dale, Haffner, Grow & Overgaard, Chicago, Ill., for plaintiff-appellant.
Robert E. Wiss, Raymond F. Simon, Corp. Counsel, Thomas A. Foran, U. S. Atty., Chicago, Ill., Morton Hollander, Chief, Appellate Section, Carl Eardley, Acting Asst. Atty. Gen., Alan S. Rosenthal, Michael C. Farrar, Attys., Dept. of Justice, Washington, D. C., for federal defendants-appellees.
George J. Schaller, O. R. Hamlink, Norman J. Barry, Chicago, Ill., for defendant-appellee, Chicago Transit Authority.
Before FAIRCHILD and KERNER, Circuit Judges, and HOLDER, District Judge.
. District Judge Holder of the Southern District of Indiana is sitting by designation.
FAIRCHILD, Circuit Judge.
South Suburban Safeway Lines, Inc. brought action challenging a grant of federal funds to the city of Chicago or its transit authority pursuant to the Urban Mass Transportation Act of 1964 (UMTA). The defendants are federal officers involved in granting the funds as well as the city and the Chicago Transit Authority.
The district court decided that South Suburban lacked standing and dismissed the action. South Suburban appealed.
South Suburban operates a bus transportation system as an Illinois public utility. Its routes extend south from the central business district of Chicago. For a considerable distance they run along or parallel to the Dan Ryan Expressway.
Chicago Transit Authority is a body politic, created by an Illinois statute for the purpose of establishing a transportation system in Cook county, Illinois. The city and authority propose an extension of the authority’s rail operations down the median strip of the Dan Ryan Expressway. South Suburban alleges that this service will compete with and destroy South Suburban’s service.
The federal defendants approved a grant to the authority for the purpose of making the extension.
South Suburban alleged that UMTA is itself unconstitutional, and claims in any event, in substance, that the federal defendants failed to make findings required by UMTA or that such findings, if made, lacked sufficient support.
As will appear, we think that South Suburban clearly lacks standing to challenge the validity of UMTA. The closer question is whether it has standing to challenge the sufficiency of the federal defendants’ compliance with the act, even though UMTA has no express provision for judicial review.
1. Taxpayer’s lack of standing to challenge validity of federal expenditure. South Suburban is undoubtedly a federal taxpayer. It is settled law that a taxpayer’s interest in federal funds is insufficient, as a general rule, for standing to challenge the validity of a federal law providing for expenditure or the validity of a particular expenditure. In Flast v. Cohen the Supreme Court found that the threat of federal expenditure in violation of the establishment clause of the first amendment gave a federal taxpayer standing to seek a judicial determination whether there was such violation. In our view, Flast indicates no change in the law of standing which would accord standing to South Suburban as a taxpayer to challenge UMTA or a particular expenditure under it.
2. South Suburban’s lack of state law right to be free from competition. Where a utility does not have a state law right to be free from competition, the threat of financial loss as a result of competition does not give standing to challenge validity of a federal loan or grant which will make the competition feasible.
The district court analyzed the status under Illinois law of the certificates of public convenience and necessity granted to South Suburban and the statutory authority granted to Chicago Transit Authority. It concluded that South Suburban has no legal right to be free of competition from the authority. We agree.
3. The effect of the Administrative Procedure Act.
5 U.S.C. § 702 provides:
“A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.”
As already pointed out, South Suburban does not have such rights under state law that a federal loan or grant assisting its competitor constitutes a “legal wrong”. UMTA does not expressly confer a right to judicial review. Whether it carries an implication that South Suburban is a person aggrieved will be separately considered.
Although one can read § 702 as conferring standing on anyone who is “adversely affected * * * by agency action”, the prevailing judicial interpretation has been that § 702 does not create standing which would not exist apart from § 702 by virtue of general principles or other statutes.
Professor Davis cites senate and house committee reports to support his opposing view “that any person adversely affected in fact by agency action has the right of review.”
This circuit has, however, followed the prevailing view.
4. The basis of challenge- to agency action in this case. South Suburban is a private “mass transportation company” under UMTA. The purposes of the act are to assist in the development of improved mass transportation facilities and to encourage planning of urban mass transportation systems, with the cooperation of mass transportation companies both public and private, and to provide assistance to state and local governments and instrumentalities in financing such systems, “to be operated by public or private mass transportation companies as determined by local needs.”
The act authorized the Secretary of Housing and Urban Development (the functions now having been transferred to the Secretary of Transportation) to make grants or loans to assist state and local public agencies in financing the acquisition and construction of mass transportation facilities.
§ 1602(c) is headed “Private transit operators” and provides in part:
“No financial assistance shall be provided * * * to any State or local public body or agency thereof for the purpose, directly or indirectly, of acquiring any interest in, or purchasing any facilities or other property of, a private mass transportation company, or for the purpose of constructing, improving, or reconstructing any facilities or other property acquired (after July 9, 1964) from any such company, or for the purpose of providing by contract or otherwise for the operation of mass transportation facilities or equipment in competition with, or supplementary to, the service provided by an existing mass transportation company, unless (1) the Secretary finds that such assistance is essential to a program, proposed or under active preparation, for a unified or officially coordinated urban transportation system as part of the comprehensively planned development of the urban area, (2) the Secretary finds that such program, to the maximum extent feasible, provides for the participation of private mass transportation companies, (3) just and adequate compensation will be paid to such companies for acquisition of their franchises or property to the extent required by applicable State or local laws, and (4) the Secretary of Labor certifies that such assistance complies with the requirements of section 1609(c) of this title.”
South Suburban has adequately alleged that a grant has been made for the purpose of providing for operation of facilities in competition with it. The federal defendants appear to concede that the proposed facilities will be supplementary to South Suburban’s service, though they do not concede there will be competition. In either event, it would necessarily follow that such grant was forbidden unless the four standards have been fulfilled. South Suburban has alleged that “there has been no showing” of the facts required by (1), (2), and (3). Presumably this is the equivalent of a charge that the secretary failed to make findings (1) and (2) or that the findings, if made, are not adequately supported, and that (3) is not fulfilled.
5. Does § 1602(c) imply that South Suburban has standing to seek judicial review? In Hardin v. Kentucky Utilities Co. a private utility alleged that T.Y.A. was violating a specific statutory prohibition by expansion of its service into an area which plaintiff served. There was no express provision for judicial review. But the Court found, from the nature and history of the prohibition, that one of its primary purposes was to protect private utilities from T.V.A. competition. After noting the usual rule that injury by competition does not confer standing, the Court said that “when the particular statutory provision invoked does reflect a legislative purpose to protect a competitive interest, the injured competitor has standing to require compliance with that provision.”
The text of § 1602 does indeed show a concern that private ownership of existing mass transportation systems should not be unnecessarily or unfairly disturbed. But we do not find the clarity of purpose to prohibit competition with private utilities which was manifest in the statute in Hardin. In § 1602, Congress seems to have been primarily concerned over the possibility of public acquisition of private facilities (a subject not involved in this action) although competition with and supplementation of existing facilities were also dealt with. § 1602 begins with a prohibition against granting federal assistance for any of those purposes, but then relieves from such prohibition if four standards are met.
Each standard except (3), which is irrelevant here, calls for an administrative decision which is essentially an exercise of discretion. (1) requires a decision that the assistance is “essential to a program, proposed or under active preparation, for a unified or officially coordinated urban transportation system as part of the comprehensively planned development of the urban area.” (2) requires a decision that “such program, to the maximum extent feasible, provides for the participation of private mass transportation companies.” (3), although demonstrated to be inapplicable to South Suburban as a matter of law, requires that state law rights to adequate compensation for franchises or property be fulfilled. (4) requires a decision by the Secretary of Labor that fair and equitable arrangements are made to protect the interests of affected employees.
In the instant case the questions (1) whether the statute implies that a private utility claiming it will suffer competitive injury has standing, (2) whether the administrative decision is left so largely to discretion as to be reviewable at all, and (3) as to the scope of judicial review, tend to merge into one. The more the fulfillment of the standards is left to administrative discretion, the less the basis for implication of standing. It is our best judgment that Congress was satisfied that its statutory command to the secretaries was sufficient for its purpose, without resort to judicial review.
Assuming, however, that South Suburban has standing, we would come to the affidavit filed by the federal defendants in support of their motion for summary judgment.
The affiant was the Deputy Assistant Secretary for Metropolitan Development in the Department of Housing and Urban Development (which originally had jurisdiction in the matter). He asserted that officers of the department had reviewed the city’s application for assistance and had made on site inspections and evaluations of the project. He named documents relating to planning for the Chicago urban area and its transportation system which were reviewed and considered. He listed a number of instances of participation of private transportation companies in an officially coordinated mass transportation system, and described one area of intended coordination of South Suburban’s service with the proposed project. He set forth the findings made on the basis of the studies described, and they fulfilled standards (1), (2), and (4) in § 1602(c). With respect to (3) it was found that no franchise or property of a private mass transportation company would be acquired. Affiant stated that he had approved the grant in the exercise of powers formally delegated to him by the secretary.
As already suggested, the questions of standing, reviewability, and scope of review tend to merge. We conclude that even if South Suburban be accorded standing to challenge administrative compliance with § 1602(c), the review is so limited that South Suburban can not succeed.
No hearing was required by any statute. There is no record to examine. The elements of the findings to be made are discretionary, essentially more quasi legislative than quasi judicial. Surely Congress intended no trial de novo. The procedure which was followed shows that the administrative agency did address itself to the questions posed by § 1602(c), in a rational manner, and resolve them by findings which met the statutes. The showing made, we think, would support the agency decision in terms of the scope of review to which South Suburban might, at the utmost, be entitled.
The judgment is affirmed.
. 49 U.S.C. §§ 1601-1611.
. South Suburban Safeway Lines, Inc. v. City of Chicago (N.D.Ill., 1968), 285 F.Supp. 676.
. Frothingham v. Mellon (1923), 262 U.S. 447, 487, 43 S.Ct. 597, 67 L.Ed. 1078, 1085.
. (1968), 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947.
. Alabama Power Co. v. Ickes (1938), 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374; Tennessee Electric Power Co. v. T. V. A. (1939), 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543; Duke Power Co. v. Greenwood (1938), 302 U.S. 485, 58 S.Ct. 306, 82 L.Ed. 381. Cf. Public Service Company of Indiana v. Hamil, 416 F.2d 648 (7th Cir., 17547, Sept. 18, 1969).
. 285 F.Supp. pp. 679-680.
. Kansas City Power & Light Co. v. McKay (1955), 96 U.S.App.D.C. 273, 225 F.2d 924, cert. denied, 350 U.S. 884, 76 S.Ct. 137, 100 L.Ed. 780; Duba v. Schuetzle (8th Cir., 1962), 303 F.2d 570; Harrison-Halsted Com. Group, Inc. v. Housing & Home Finance A. (7th Cir. 1962), 310 F.2d 99; Pennsylvania R.R. v. Dillon (1964), 118 U.S.App.D.C. 257, 335 F.2d 292, cert. denied, American-Hawaiian S.S. Co., 379 U.S. 945, 85 S.Ct. 437, 13 L.Ed.2d 543; Braude v. Wirtz (9th Cir., 1965), 350 F.2d 702; Rural Electrification Admin, v. Northern States Power Co. (8th Cir., 1967), 373 F.2d 686. See Jaffe, The Right to Judicial Review II, 71 Harv.L.Rev. 769 at 790: “The Administrative Procedure Act has had negligible effect on the basic right to judicial review.”
. K. Davis, Standing — Taxpayers and Others, 35 U.Chi.L.Rev. 601, 619 (1968).
. Harrison-Halsted Com. Group v. Housing & Home Finance A. (7th Cir., 1962), 310 F.2d 99, 104, cert. denied, 373 U.S. 914, 83 S.Ct. 1297, 10 L.Ed.2d 414; Green Street Association v. Daley (7th Cir., 1967), 373 F.2d 1, 7, cert. denied, 387 U.S. 932, 87 S.Ct. 2054, 18 L.Ed.2d 995.
. We have italicized the portion of the subsection which prohibits the use of funds to provide competition with an existing company, as claimed here. The four standards which must be fulfilled in order to render either the prohibition against assistance for acquisition or the prohibition against assistance to create competition follow the italicized portion.
. South Suburban also relies upon alleged nonfulfillment of standards set forth in § 1603. The latter are less definite than those in § 1602, leave even greater latitude to the secretary, and need not, for that reason, be separately considered.
. (1968), 390 U.S. 1, 88 S.Ct. 651, 19 L.Ed.2d 787.
. 390 U.S. at 6, 88 S.Ct. at 654.
. (4) has not been an issue in this case. In Kendler v. Wirtz (3rd Cir., 1968), 388 F.2d 381, employees and their union challenged a decision of the Secretary of Labor that (4) bad been fulfilled. The third circuit did not decide whether plaintiffs had standing, but held. that the breadth of administrative discretion under (4) closely limited the scope of judicial review, virtually to whether or not the secretary had in fact made a judgment in the matter.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "private business (including criminal enterprises)". What is the scope of this business?
A. local
B. neither local nor national
C. national or multi-national
D. not ascertained
Answer:
|
songer_fedlaw
|
A
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the interpretation of federal statute, and if so, whether the resolution of the issue by the court favored the appellant.
UNITED STATES v. HENDLER.
No. 4202.
Circuit Court of Appeals, Fourth Circuit.
Aug. 6, 1937.
Arnold Raum, Sp. Asst, to Atty. Gen. (James W. Morris, Asst. Atty. Gen., and Sewall Key, Sp. Asst, to Atty. Gen., on the brief), for the United States.
William R. Semans and Randolph Barton, Jr., both of Baltimore, Md. (Joseph Addison, of Baltimore, Md., on the brief), for appellee.
Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.
SOPER, Circuit Judge.
The United States has appealed from the decision of the District Court holding that under section 112 of the Revenue Act of 1928 (26 U.S.C.A. § 112 and note) the computation of the taxable gain of the Hendler Creamery Company, Inc., resulting from the performance of a reorganization agreement with the Borden Company, should not take account of the bonded debt of the Hendler Company which was assumed by the Borden Company.
On June 21, 1929, in conformity with a “reorganization agreement” of May 21,1929, the Hendler Company transferred all of its assets to the Borden Company in exchange for 105,306 shares of the latter’s stock, $43,-421.87 in cash, and the assumption by the Borden Company of all of the outstanding liabilities of the Hendler Company, consisting of $501,000 first mortgage bonds, current bank loans of $1,050,000, and merchandise accounts of $130,410.78. As a result of the transaction, the Hendler Company made a total calculated profit of $6,608,713.65 based on the current market price of the Borden stock. After the transaction the Hendler Company discontinued business, filed its income tax return for 1929, and dissolved.
The Hendler bonds were subject to redemption on any interest date at 107y2. In accordance with an understanding which preceded the agreement of May 21,1929, the board of directors of the Hendler Company resolved on May 15, 1929, to call the bonds for redemption on July 1, 1929. The Borden Company, through the purchase of some of the bonds and the redemption of the rest, performed its promise to assume the payment of the bonds at a total cost to it of $534,297.40. This sum did not pass through the Hendler Company but was paid directly to the bondholders. The Hendler Company did not include it in its income tax return for 1929 nor any part of the profit realized in the reorganization. ' The Commissioner reached the determination that while the total profit on the exchange was not taxable, the item of $534,297.40 was taxable and made a deficiency assessment of $58,772.72 with interest of $10,781.97, which was paid by L. Manuel Hendler, as transferee. The present suit was filed to recover these amounts after a claim for refund had been denied. The District Court ordered the refund, finding a verdict for $62,145.89 which represented the amount of the plaintiff’s claim less an offset based on circumstances not involved in the pending case.
Section 112 of the Revenue Act of 1928, 45 Stat. 791, 816 (26 U.S.C.A. § 112 and note), provides in part as follows:
Ҥ 112. Recognition of gain or loss
“(a) General rule. Upon the sale or «ixchange of property the entire amount of the gain or loss determined under section 111, shall be recognized, except as hereinafter provided in this section.
“(b) Exchanges solely in kind — * * *
“(4) Same. [Stock for Stock Reorganisation] — Gain of corporation. No gain or loss shall be recognized if a corporation a party to a reorganization exchanges property, in pursuance of the plan of reorganization, solely for stock or securities in another corporation a party to the reorganization. if: >f; jf:
“(d) Same. [Gain from Exchanges not Solely in Kind] — Gain of corporation. If an exchange would be within the provisions of subsection (b) (4) of this section if it were not for the fact that the property received in exchange consists not only' of stock or securities permitted by such paragraph to be received without the recognition of gain, but also of other property or money, then—
“(1) If the corporation receiving such other property or money distributes it in pursuance of the plan of reorganization, no gain to the corporation shall be recognized from the exchange, but
“(2) If the corporation receiving such other property or money does not distribute it in pursuance of the plan of reorganization, the gain, if any, to the corporation shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which it not so distributed.”
The contention of the United States is that under section 112(a) of the statute the entire amount of the gain or loss upon the sale or exchange of property is recognized in computing the income tax, unless the transaction falls withi-n one of the exceptions enumerated in the section; and that the only exceptions relied upon by the taxpayer, to wit, section 112(b) (4) and section 112 (d), are not applicable to the facts of the case. It is not denied that there was a “reorganization” as defined in section 112 (i), 45 Stat. 816 (26 U.S.C.A. § 112 and note) ; see Helvering v. Minnesota Tea Co., 296 U.S. 378, 56 S.Ct. 269, 80 L.Ed. 284; Helvering v. Watts, 296 U.S. 387, 56 S.Ct. 275, 80 L.Ed. 289; G. & K. Mfg. Co. v. Helvering, 296 U.S. 389, 56 S.Ct. 276, 80 L.Ed. 291; but it is said that the taxpayer did not exchange its property in pursuance of a plan of reorganization solely for stock or securities in the Borden Company within the terms of section 112(b) (4), but also received $43,421.87 in cash and an assumption of the taxpayer’s liability which included the bonded indebtedness discharged at a cost of $534,297.40; and it is contended that this assumption of indebtedness was not money or property within the true construction of section 112(d), or if it was money or property, it was not distributed in pursuance of the plan of reorganization within the terms of the section. Hence it is said that the item of $534,297.40 should be added to the taxable income.
At the outset we are assailed by the doubts aroused by the failure of the government to press its argument to the conclusion which would seem to follow if its premises, based upon a literal interpretation of the language, are sound. If the assumption of the bonded indebtedness did not constitute money or property, but nevertheless represented taxable value received by the taxpayer, it would seem that the transaction was not covered by the literal terms of either section 112(b) (4) or section 112(d), and that therefore the .entire profit of $6,608,-713.85 was taxable under section 112(a) of the statute; and on the other hand, if such assumption did constitute money or property not distributed under section 112(d), manifestly the assumption of the current bank loans in the amount of $1,050,000 and of the merchandise accounts in the amount of $130,410.78 was of the same nature and these sums should have been added to the taxable profit. The omission of the Government in these respects is difficult to understand.
In our opinion, however, the decision of the District Court was correct. We do not question the rule that the payment of an obligation of a taxpayer by another person constitutes income to the taxpayer. Old Colony Trust Co. v. Commissioner, 279 U.S. 716, 49 S.Ct. 499, 73 L.Ed. 918; United States v. Boston & M. R. R., 279 U.S. 732, 49 S.Ct. 505, 73 L.Ed. 929; Gold & Stock Telegraph Co. v. Commissioner (C.C.A.) 83 F.(2d) 465; Houston Belt & Terminal Ry. Co. v. United States (C.C.A.) 250 F. 1; Douglas v. Willcuts, 296 U.S. 1, 9, 56 S.Ct. 59, 62, 80 L.Ed. 3, 101 A.L.R. 391. And of course the assumption not only of bonded indebtedness but also of all other forms of indebtedness owing by a taxpayer must necessarily be taken into account in computing tire taxpayerVprofit in a reorganization. However, it does not follow that the amount •of indebtedness assumed is taxable as profit at the time that the reorganization is effected ; and it is significant that the usual practice of the Commissioner has been quite to the contrary.
The sections of the act in question must be construed in view of the purposes which they were intended to effect. It is well known that the purpose was to provide for the exemption from taxation at the time of a business reorganization of the gains involved therein to the extent specified in the statute in order to remove impediments to corporate readjustments and also to prevent the recognition of fictitious gains or losses. The history of the legislation and the committee reports in Congress clearly manifest this legislative intention. C. H. Mead Coal Co. v. Commissioner (C.C.A.) 72 F.(2d) 22, 27, 28; Minnesota Tea Co. v. Commissioner (C.C.A.) 76 F.(2d) 797, 802. Baar & Morris on Hidden Taxes & Corporate Reorganization, p. 244. The result is to defer the taxation of such gains until they are subsequently realized by the corporation grantor or its stockholders through the liquidation of the securities or property received.
So it was provided in effect that no gain should be recognized in the exchange of property solely for stock or securities in the transferee corporation; or if the property received in exchange should also, include property or money other than stock or securities, the gain should be recognized only to the extent that such other property or money was not distributed in pursuance óf the plan of reorganization. Now it seems to us, bearing in mind the general purpose of the statute, that it was not the intention of Congress to recognize for immediate taxation the gain derived in a corporate reorganization to the extent it should consist of an assumption of the debts of the corporate grantor. Such an assumption is undoubtedly an asset of value and may fairly be called property in the broad sense; but the money spent in the performance of the promise passes to creditors and does not come into the possession of the debtor corporation or its stockholders. It reduces the debts and therefore frees the assets from the claims of creditors so that they may be lawfully distributed amongst the stockholders or otherwise disposed of; but it does not increase in their hands the assets whose liquidation brings about the actual enjoyment of the realized profit. Therefore the recognition of the gain, to the extent of the amount of the debt assumed, would not serve the statutory purpose, but on the contrary would tend to defeat it. It is a matter of common knowledge that a promise by the grantee to assume the debts of the grantor corporation is a customary incident of reorganization agreements, and where the transaction yields a profit to the grantor, taxable gain up to the amount of the assumed debt would accrue in the current year if the present contention of the Commissioner is correct, whether or not at that time the corporation or its stockholders had actually realized the profit in the transaction.
It seems obvious that Congress in referring to the receipt of stock or securities in section 112(b) (4) and to the receipt of money and other property in section 112(d) had in mind the sort of property that is susceptible of distribution among stockholders. Indeed, this is part of the argument of the government which asserts that a distribution in reorganization generally contemplates a distribution among stockholders and that it would be a distortion of language to misconstrue the word “distribute” to mean the payment of creditors. But it does not follow, as the government contends, that when the taxpayer secures an assumption of its debts in addition to stock and securities or distributable property, it is not entitled to the exemption claimed. Congress has adopted the realistic conception that the substantial value which a corporation owns is the equity in its corporate property — that is, the value of its assets after provision has been made for the payment of its debts — that what the grantee acquires in a corporate reorganization is this equity, and that its assumption of liabilities is merely the means by which it is enabled to acquire a good title to the grantor’s property. If this viewpoint is kept in mind, it is clear that the grantor in a reorganization agreement receives nothing from the assumption of its debts by the grantee- that prevents it from claiming an exemption under Cither of the cited sections of the statute.
It must not be supposed that the gain derived by the corporate grantor from the assumption of its debts will entirely escape taxation through this construction of the act. Manifestly the price paid for the corporate assets by the grantee includes both the value which passes to the corporation or its stockholders and that which passes to its creditors; and the entire profit will be recognized, when upon the ultimate liquidation of the assets actually received by the corporation or its stockholders a comparison is made between that which was originally put into the venture and that which has been finally taken out.
We have been referred to the decisions in Helvering v. Minnesota Tea Co. (C.C.A.) 89 F.(2d) 711, and Liquidating Co. v. Commissioner, 33 B.T.A. 1173; but in so far as they are at variance with the views herein expressed, we are constrained to disagree,
Affirmed.
Question: Did the interpretation of federal statute by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_r_fed
|
1
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "the federal government, its agencies, and officials". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
TAKAJI MUKAI v. BURNETT, District Director.
No. 6888.
Circuit Court of Appeals, Ninth Circuit.
Dec. 19, 1932.
J. Edward Keating and Theodore E. Bowen, both of Los Angeles, Cal., for appellant.
Samuel W. McNabb, U. S. Atty., and Harry G. Balter, Asst. U. S. Atty., both of Los Angeles, Cal. (Harry B. Blee, Immigration Service, of Los Angeles, Cal., on the brief), 1 for appellee.
Before WILBUR, SAWTELLE, and MACK, Circuit Judges.
PER CURIAM.
Appellant, Takaji Mukai, entered the United States in April, 1925. At that time he had no immigration visa and was not entitled to enter the United States. Ozawa v. United States, 260 U. S. 178, 43 S. Ct. 65, 67 L. Ed. 199; section 13 (e), Immigration Act of 1924 (8 USCA 213(e). He is subject to deportation under section 14 of the Immigration Act of 19214 (8 USCA § 214). Appellant contends that the deportation proceeding is barred by reason of the fact that more than five years have expired from the time of his first entry, which occurred more than five years prior to the initiation of the deportation proceeding. In support of his contention he relies upon the provisions of section 19 of the Immigration Act of 1917 (8 USCA § 155), and the amendment contained in section 14 of the Immigration Act of 1924. This contention has been decided adversely to the appellant in Philippides v. Day, 283 U. S. 48, 51 S. Ct. 358, 75 L. Ed. 833, and U. S. v. Vanbiervliet, 284 U. S. 590, 52 S. Ct. 132, 76 L. Ed. —-. See, also, United States ex rel. Leo Stapf v. Corsi, 53 S. Ct. 40, 77 L. Ed. —-, decided by the Supreme Court November 7, 1932; Hendriksen v. Weedin, 61 F.(2d) 1030, decided by this court November 16, 1932.
Order affirmed.
Question: What is the total number of respondents in the case that fall into the category "the federal government, its agencies, and officialss"? Answer with a number.
Answer:
|
sc_caseorigin
|
160
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the court in which the case originated. Focus on the court in which the case originated, not the administrative agency. For this reason, if appropiate note the origin court to be a state or federal appellate court rather than a court of first instance (trial court). If the case originated in the United States Supreme Court (arose under its original jurisdiction or no other court was involved), note the origin as "United States Supreme Court". If the case originated in a state court, note the origin as "State Court". Do not code the name of the state. The courts in the District of Columbia present a special case in part because of their complex history. Treat local trial (including today's superior court) and appellate courts (including today's DC Court of Appeals) as state courts. Consider cases that arise on a petition of habeas corpus and those removed to the federal courts from a state court as originating in the federal, rather than a state, court system. A petition for a writ of habeas corpus begins in the federal district court, not the state trial court. Identify courts based on the naming conventions of the day. Do not differentiate among districts in a state. For example, use "New York U.S. Circuit for (all) District(s) of New York" for all the districts in New York.
VIRGINIA v. HICKS
No. 02-371.
Argued April 30, 2003
Decided June 16, 2003
Scalia, J., delivered the opinion for a unanimous Court. Souter, J., filed a concurring opinion, in which Breyer, J., joined, post, p. 124.
William H. Hurd, State Solicitor of Virginia, argued the cause for petitioner. With him on the briefs were Jerry W. Kilgore, Attorney General, Maureen Riley Matsen and William E. Thro, Deputy State Solicitors, and Christy A. McCormick and A. Cameron O’Brion, Assistant Attorneys General.
Deputy Solicitor General Dreeben argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Olson, Assistant Attorneys General Chertoff and McCallum, James A. Feld-man, Michael Jay Singer, and Stephanie R. Marcus.
Steven D. Benjamin argued the cause for respondent. With him on the brief were Amanda Frost, Brian Wolfman, and Alan B. Morrison.
Briefs of amici curiae urging reversal were filed for the City of Richmond et al. by William G. Broaddus, Jonathan T. Blank, William H. Baxter II, Godfrey T. Pinn, Jr., and John A. Rupp; for the Council of Large Public Housing Authorities et al. by Robert A. Graham, William F. Maher, and Carl A, S. Coan III; for the Criminal Justice Legal Foundation by Kent S. Scheidegger; and for the National League of Cities et al. by Richard Ruda and James I. Crowley.
Briefs of amici curiae urging affirmance were filed for the American Civil Liberties Union et al. by Mark J. Lopez, Steven R. Shapiro, Rebecca Glenberg, and David M. Porter; for the DKT Liberty Project by Julia M. Carpenter; for the Richmond Tenants Organization et al. by Catherine M. Bishop; for the Thomas Jefferson Center for the Protection of Free Expression by J. Joshua Wheeler and Robert M. O’Neil; and for Watchtower Bible and Tract Society of New York, Inc., by Paul D. Polidoro and Philip Brumley.
A brief of amici curiae was filed for the State of Alabama et al. by Jeremiah W. (Jay) Nixon, Attorney General of Missouri, James R. Lay-ton, State Solicitor, Erwin O. Switzer III, and Michele L. Jackson, Assistant Attorney General of Alabama, and by the Attorneys General for their respective jurisdictions as follows: Gregg D. Renkes of Alaska, M. Jane Brady of Delaware, Mark J. Bennett of Hawaii, Steve Carter of Indiana, Charlie J. Crist, Jr., of Florida, Mike Moore of Mississippi, Jim Petro of Ohio, W A Drew Edmondson of Oklahoma, Hardy Myers of Oregon, An-abelle Rodriguez of Puerto Rico, Lawrence E. Long of South Dakota, Paul G. Summers of Tennessee, Greg Abbott of Texas, and Mark L. Shurtleff of Utah.
Justice Scalia
delivered the opinion of the Court.
The issue presented in this case is whether the Richmond Redevelopment and Housing Authority’s trespass policy is facially invalid under the First Amendment’s overbreadth doctrine.
H-l
The Richmond Redevelopment and Housing Authority (RRHA) owns and operates a housing development for low-income residents called Whitcomb Court. Until June 23, 1997, the city of Richmond owned the streets within Whit-comb Court. The city council decided, however, to “privatize” these streets in an effort to combat rampant crime and drug dealing in Whitcomb Court — much of it committed and conducted by nonresidents. The council enacted Ordinance No. 97-181-197, which provided, in part:
“‘§1. That Carmine Street, Bethel Street, Ambrose Street, Deforrest Street, the 2100-2300 Block of Sussex Street and the 2700-2800 Block of Magnolia Street, in Whitcomb Court... be and are hereby closed to public use and travel and abandoned as streets of the City of Richmond.’ ” App. to Pet. for Cert. 93-94.
The city then conveyed these streets by a recorded deed to the RRHA (which is a political subdivision of the Commonwealth of Virginia). This deed required the RRHA to “ ‘give the appearance that the closed street, particularly at the entrances, are no longer public streets and that they are in fact private streets.’” Id., at 95. To this end, the RRHA posted red-and-white signs on each apartment building — and every 100 feet along the streets — of Whitcomb Court, which state: ‘“NO TRESPASSING^ PRIVATE PROPERTY[.] YOU ARE NOW ENTERING PRIVATE PROPERTY AND STREETS OWNED BY RRHA. UNAUTHORIZED PERSONS WILL BE SUBJECT TO ARREST AND PROSECUTION. UNAUTHORIZED VEHICLES WILL BE TOWED AT OWNERS EXPENSE.’” Pet. for Cert. 5. The RRHA also enacted a policy authorizing the Richmond police
“‘to serve notice, either orally or in writing, to any person who is found on Richmond Redevelopment and Housing Authority property when such person is not a resident, employee, or such person cannot demonstrate a legitimate business or social purpose for being on the premises. Such notice shall forbid the person from returning to the property. Finally, Richmond Redevelopment and Housing Authority authorizes Richmond Police Department officers to arrest any person for trespassing after such person, having been duly notified, either stays upon or returns to Richmond Redevelopment and Housing Authority property.’” App. to Pet. for Cert. 98-99 (emphasis added).
Persons who trespass after being notified not to return are subject to prosecution under Va. Code Ann. § 18.2-119 (1996):
“If any person without authority of law goes upon or remains upon the lands, buildings or premises of another, or any portion or area thereof, after having been forbidden to do so, either orally or in writing, by the owner, lessee, custodian or other person lawfully in charge thereof ... he shall be guilty of a Class 1 misdemeanor.”
B
Respondent Kevin Hicks, a nonresident of Whitcomb Court, has been convicted on two prior occasions of trespassing there and once of damaging property there. Those convictions are not at issue in this case. While the property-damage charge was pending, the RRHA gave Hicks written notice barring him from Whitcomb Court, and Hicks signed this notice in the presence of a police officer. Twice after receiving this notice Hicks asked for permission to return; twice the Whitcomb Court housing manager said “no.” That did not stop Hicks; in January 1999 he again trespassed at Whitcomb Court and was arrested and convicted under §18.2-119.
At trial, Hicks maintained that the RRHA’s policy limiting access to Whitcomb Court was both unconstitutionally over-broad and void for vagueness. On appeal of his conviction, a three-judge panel of the Court of Appeals of Virginia initially rejected Hicks’ contentions, but the en banc Court of Appeals reversed. That court held that the streets of Whit-comb Court were a “traditional public forum,” notwithstanding the city ordinance declaring them closed, and vacated Hicks’ conviction on the ground that RRHA’s policy violated the First Amendment. 36 Va. App. 49, 56, 548 S. E. 2d 249, 253 (2001). The Virginia Supreme Court affirmed the en banc Court of Appeals, but for different reasons. Without deciding whether the streets of Whitcomb Court were a public forum, the Virginia Supreme Court concluded that the RRHA policy was unconstitutionally overbroad. While acknowledging that the policy was “designed to punish activities that are not protected by the First Amendment,” 264 Va. 48, 58, 568 S. E. 2d 674, 680 (2002), the court held that “the policy also prohibits speech and conduct that are clearly protected by the First Amendment,” ibid. The court found the policy defective because it vested too much discretion in Whitcomb Court’s manager to determine whether an individual’s presence at Whitcomb Court is “authorized,” allowing her to “prohibit speech that she finds personally distasteful or offensive even though such speech may be protected by the First Amendment.” Id., at 60, 563 S. E. 2d, at 680-681. We granted the Commonwealth’s petition for certiorari. 537 U. S. 1169 (2003).
II
A
Hicks does not contend that he was engaged in constitutionally protected conduct when arrested; nor does he challenge the validity of the trespass statute under which he was convicted. Instead he claims that the RRHA policy barring him from Whitcomb Court is overbroad under the First Amendment, and cannot be applied to him — or anyone else. The First Amendment doctrine of overbreadth is an exception to our normal rule regarding the standards for facial challenges. See Members of City Council of Los Angeles v. Taxpayers for Vincent, 466 U. S. 789, 796 (1984). The showing that a law punishes a “substantial” amount of protected free speech, “judged in relation to the statute’s plainly legitimate sweep,” Broadrick v. Oklahoma, 413 U. S. 601, 615 (1973), suffices to invalidate all enforcement of that law, “until and unless a limiting construction or partial invalidation so narrows it as to remove the seeming threat or deterrence to constitutionally protected expression,” id., at 613. See also Virginia v. Black, 538 U. S. 343, 367 (2003); New York v. Ferber, 458 U. S. 747, 769, n. 24 (1982); Dombrowski v. Pfister, 380 U. S. 479, 491, and n. 7, 497 (1965).
We have provided this expansive remedy out of concern that the threat of enforcement of an overbroad law may deter or “chill” constitutionally protected speech — especially when the overbroad statute imposes criminal sanctions. See Schaumburg v. Citizens for a Better Environment, 444 U. S. 620, 634 (1980); Bates v. State Bar of Ariz., 433 U. S. 350, 380 (1977); NAACP v. Button, 371 U. S. 415, 433 (1963). Many persons, rather than undertake the considerable burden (and sometimes risk) of vindicating their rights through case-by-case litigation, will choose simply to abstain from protected speech, Dombrowski, supra, at 486-487—harming not only themselves but society as a whole, which is deprived of an uninhibited marketplace of ideas. Overbreadth adjudication, by suspending all enforcement of an overinclusive law, reduces these social costs caused by the withholding of protected speech.
As we noted in Broadrick, however, there comes a point at which the chilling effect of an overbroad law, significant though it may be, cannot justify prohibiting all enforcement of that law — particularly a law that reflects “legitimate state interests in maintaining comprehensive controls over harmful, constitutionally unprotected conduct.” 413 U. S., at 615. For there are substantial social costs created by the over-breadth doctrine when it blocks application of a law to constitutionally unprotected speech, or especially to constitutionally unprotected conduct. To ensure that these costs do not swallow the social benefits of declaring a law “overbroad,” we have insisted that a law’s application to protected speech be “substantial,” not only in an absolute sense, but also relative to the scope of the law’s plainly legitimate applications, ibid., before applying the “strong medicine” of overbreadth invalidation, id., at 613.
B
Petitioner asks this Court to impose restrictions on “the use of overbreadth standing,” limiting the availability of facial overbreadth challenges to those whose own conduct involved some sort of expressive activity. Brief for Petitioner 13, 24-31. The United States as amicus curiae makes the same proposal, Brief for United States as Amicus Curiae 14-17, and urges that Hicks’ facial challenge to the RRHA trespass policy “should not have been entertained,” id., at 10. The problem with these proposals is that we are reviewing here the decision of a State Supreme Court; our standing rules limit only the federal courts’ jurisdiction over certain claims. “[S]tate courts are not bound by the limitations of a case or controversy or other federal rules of justiciability even when they address issues of federal law.” ASARCO Inc. v. Radish, 490 U. S. 605, 617 (1989). Whether Virginia’s courts should have entertained this overbreadth challenge is entirely a matter of state law.
This Court may, however, review the Virginia Supreme Court’s holding that the RRHA policy violates the First Amendment. We may examine, in particular, whether the claimed overbreadth in the RRHA policy is sufficiently “substantial” to produce facial invalidity These questions involve not standing, but “the determination of [a] First Amendment challenge on the merits.” Secretary of State of Md. v. Joseph H. Munson Co., 467 U. S. 947, 958-959 (1984). Because it is the Commonwealth of Virginia, not Hicks, that has invoked the authority of the federal courts by petitioning for a writ of certiorari, our jurisdiction to review the First Amendment merits question is clear under ASARCO, 490 U. S., at 617-618. The Commonwealth has suffered, as a consequence of the Virginia Supreme Court’s “final judgment altering tangible legal rights,” id., at 619, an actual injury in fact — inability to prosecute Hicks for trespass — that is sufficiently “distinct and palpable” to confer standing under Article III, Warth v. Seldin, 422 U. S. 490, 501 (1975). We accordingly proceed to that merits inquiry, leaving for another day the question whether our ordinary rule that a litigant may not rest a claim to relief on the legal rights or interests of third parties, see Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 474 (1982), would exclude a case such as this from initiation in federal court.
C
The Virginia Supreme Court found that the RRHA policy allowed Gloria S. Rogers, the manager of Whitcomb Court, to exercise “unfettered discretion” in determining who may use the RRHA’s property. 264 Va., at 59, 563 S. E. 2d, at 680. Specifically, the court faulted an “unwritten” rule that persons wishing to hand out flyers on the sidewalks of Whit-comb Court need to obtain Rogers’ permission. Ibid. This unwritten portion of the RRHA policy, the court concluded, unconstitutionally allows Rogers to “prohibit speech that she finds personally distasteful or offensive.” Id., at 60, 563 S. E. 2d, at 681.
Hicks, of course, was not arrested for leafleting or demonstrating without permission. He violated the RRHA’s written rule that persons who receive a barment notice must not return to RRHA property. The Virginia Supreme Court, based on its objection to the “unwritten” requirement that demonstrators and leafleters obtain advance permission, declared the entire RRHA trespass policy overbroad and void — including the written rule that those who return after receiving a barment notice are subject to arrest. Whether these provisions are severable is of course a matter of state law, see Leavitt v. Jane L., 518 U. S. 137, 139 (1996) (per curiam), and the Virginia Supreme Court has implicitly decided that they are not — that all components of the RRHA trespass policy must stand or fall together. It could not properly decree that they fall by reason of the overbreadth doctrine, however, unless the trespass policy, taken as a whole, is substantially overbroad judged in relation to its plainly legitimate sweep. See Broadrick, 413 U. S., at 615. The overbreadth claimant bears the burden of demonstrating, “from the text of [the law] and from actual fact,” that substantial overbreadth exists. New York State Club Assn., Inc. v. City of New York, 487 U. S. 1, 14 (1988).
Hicks has not made such a showing with regard to the RRHA policy taken as a whole — even assuming, arguendo, the unlawfulness of the policy’s, “unwritten” rule that demonstrating and leafleting at Whitcomb Court require permission from Gloria Rogers. Consider the “no-return” notice served on nonresidents who have no “legitimate business or social purpose” in Whitcomb Court: Hicks has failed to demonstrate that this notice would even be given to anyone engaged in constitutionally protected speech. Gloria Rogers testified that leafleting and demonstrations are permitted at Whitcomb Court, so long as permission is obtained in advance. App. to Pet. for Cert. 100-102. Thus, “legitimate business or social purpose” evidently includes leafleting and demonstrating; otherwise, Rogers would lack authority to permit those activities on RRHA property. Hicks has failed to demonstrate that any First Amendment activity falls outside the “legitimate business or social purpose[s]” that permit entry. As far as appears, until one receives a barment notice, entering for a First Amendment purpose is not a trespass.
As for the written provision authorizing the police to arrest those who return to Whitcomb Court after receiving a barment notice: That certainly does not violate the First Amendment as applied to persons whose postnotice entry is not for the purpose of engaging in constitutionally protected speech. And Hicks has not even established that it would violate the First Amendment as applied to persons whose postnotice entry is for that purpose. Even assuming the streets of Whitcomb Court are a public forum, the notice-barment rule subjects to arrest those who reenter after trespassing and after being warned not to return — regardless of whether, upon their return, they seek to engage in speech. Neither the basis for the barment sanction (the prior trespass) nor its purpose (preventing future trespasses) has anything to do with the First Amendment. Punishing its violation by a person who wishes to engage in free speech no more implicates the First Amendment than would the punishment of a person who has (pursuant to lawful regulation) been banned from a public park after vandalizing it, and who ignores the ban in order to take part in a political demonstration. Here, as there, it is Hicks’ nonexpressive conduct— his entry in violation of the notice-barment rule — not his speech, for which he is punished as a trespasser.
Most importantly, both the notice-barment rule and the “legitimate business or social purpose” rule apply to all persons who enter the streets of Whitcomb Court, not just to those who seek to engage in expression. The rules apply to strollers, loiterers, drug dealers, roller skaters, bird watchers, soccer playérs, and others not engaged in constitutionally protected conduct — a group that would seemingly far outnumber First Amendment speakers. Even assuming invalidity of the “unwritten” rule that requires leafleters and demonstrators to obtain advance permission from Gloria Rogers, Hicks has not shown, based on the record in this ease, that the RRHA trespass policy as a whole prohibits a “substantial” amount of protected speech in relation to its many legitimate applications. That is not surprising, since the overbreadth doctrine’s concern with “chilling” protected speech “attenuates as the otherwise unprotected behavior that it forbids the State to sanction moves from ‘pure speech’ toward conduct.” Broadrick, supra, at 615. Rarely, if ever, will an overbreadth challenge succeed against a law or regulation that is not specifically addressed to speech or to conduct necessarily associated with speech (such as picketing or demonstrating). Applications of the RRHA policy that violate the First Amendment can still be remedied through as-applied litigation, but the Virginia Supreme Court should not have used the “strong medicine” of overbreadth to invalidate the entire RRHA trespass policy. Whether respondent may challenge his conviction on other grounds — and whether those claims have been properly preserved — are issues we leave open on remand.
* * *
For these reasons, we reverse the judgment of the Virginia Supreme Court and remand the case for further proceedings not inconsistent with this opinion.
It is so ordered.
The letter stated, in part: ‘“This letter serves to inform you that effective immediately you are not welcome on Richmond Redevelopment and Housing Authority’s Whitcomb Court or any Richmond Redevelopment and Housing Authority property. This letter is an official notice informing you that you are not to trespass on RRHA property. If you are seen or caught on the premises, you will be subject to arrest by the police.’ ” 264 Va. 48, 53, 563 S. E. 2d 674, 677 (2002).
As noted, the Virginia Supreme Court held that invalidity of the RRHA policy entitled Hicks to vacatur of his conviction under the unquestionably valid trespass statute, which Hicks unquestionably violated. We do not reach the question whether federal law compels this result.
Contrary to Justice Souter's suggestion, post, at 124 (concurring opinion), the Supreme Court of Virginia did not focus solely on the “unwritten” element of the RRHA trespass policy “[i]n comparing invalid applications against valid ones for
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Answer:
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songer_usc1
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18
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited title of the U.S. Code in the headnotes to this case. Answer "0" if no U.S. Code titles are cited. If one or more provisions are cited, code the number of the most frequently cited title.
UNITED STATES of America v. Anthony SALERNO et al. Appeal of Howard SILVERMAN, in No. 73-1195. Appeal of William SILVERMAN, in No. 73-1196. Appeal of Angelo ROSSI, Jr., in No. 73-1197.
Nos. 73-1195 to 73-1197.
United States Court of Appeals, Third Circuit.
Argued Sept. 5,1973.
Decided Sept. 25, 1973.
Daniel H. Greenberg, New York City, for appellants in Nos. 73-1195 and 73-1196.
Morris M. Goldings, and Robert A. Saggese, Mahoney, Atwood & Goldings, Boston, Mass., for appellant in No. 73-1197.
Herbert J. Stern, U. S. Atty., and Richard S. Zackin, Asst. U. S. Atty., Newark, N. J., for appellee.
Before HASTIE, VAN DUSEN and GIBBONS, Circuit Judges.
OPINION OF THE COURT
PER CURIAM:
These appeals challenge judgment and commitment orders of the district court entered after jury verdicts had been returned finding the defendants-appellants Rossi, H. Silverman and W. Silverman guilty on Count 1 of the indictment, charging conspiracy to transport stolen securities in interstate commerce in violation of 18 U.S.C. § 371, and defendant-appellant Rossi guilty on various substantive counts (Counts 3, 6, 7, 8 and 9), charging the transportation of stolen securities in interstate commerce in violation of 18 U.S.C. §§ 2 and 2314. After careful consideration of the contentions of defendants-appellants, we have con-eluded that the record requires the affirmance of the judgments and commitments of the district court.
Appellants contend, inter alia, that the evidence at trial was insufficient to prove that they were members of the overall, single conspiracy charged in the indictment in that the evidence established at most that they participated in separate, multiple conspiracies. In analyzing this contention, this court must view the evidence “in the light most favorable to the prosecution in order to sustain the convictions.” United States v. DeCavalcante, 440 F.2d 1264, 1273 (3d Cir. 1971). The evidence at trial established that co-defendants Zelmanowitz, Green, Beckley and Salerno (all severed from the trial for various reasons) were at the core of a conspiracy formed to procure stolen securities of various types for subsequent sale to unsuspecting brokerage houses. Each of these individuals performed a specialized function in furtherance of the conspiracy. Green and Beckley were continuously pursuing stolen securities which, when found, were purchased and turned over to Zelmanowitz for resale after Salerno had checked out the reliability of the seller. The evidence further e$tablished, largely through the testimony of eoeonspirator Zelmanowitz, the Government’s main witness, that defendant Rossi supplied the core group with stolen securities on two occasions and that appellants Silverman supplied the core group with counterfeit securities on one occasion.
Appellants Rossi and Silverman argue that they were not members of the overall conspiracy because they merely sold to a pre-existing conspiracy without knowledge of the members or scope of this conspiracy. The appellants rely upon the case of United States v. Falcone, 311 U.S. 205, 61 S.Ct. 204, 85 L.Ed. 128 (1940), in which the Supreme Court held that mere selling of materials to a conspiracy, even where the seller has knowledge that the materials sold would be used illegally, does not render the seller a participant in the conspiracy absent knowledge of the conspiracy itself. Subsequently, however, in Direct Sales Co. v. United States, 319 U.S. 703, 63 S.Ct. 1265, 87 L.Ed. 1674 (1943), the Supreme Court rejected the argument that one who sells articles used by a conspiracy cannot be found guilty of that conspiracy. The Court indicated that one who does sell to a conspirator with knowledge of the conspiracy can become a party to the conspiracy by aiding and abetting it. Id. at 709, 63 S.Ct. 1265. The district court properly charged on this permissible basis of guilt.
In the present case, there is ample evidence in the record to establish that appellant Rossi knowingly participated in the overall conspiracy. Rossi met with Zelmanowitz and Beckley on numerous occasions to discuss the sale of stolen securities, made two such sales to Zelmanowitz and Beckley, was expressly told that the securities would be resold by Zelmanowitz, and supplied Zelmanowitz with false identification in order to facilitate the resale. Similarly, there is ample evidence in the record indicating that appellants Silverman aided and abetted the conspiracy by selling to conspirators with full knowledge that they were dealing with a conspiracy. First, in negotiating and consummating the sale, they dealt directly with two members of the conspiracy, Zelmanowitz and Green. Second, they were clearly informed that Zelmanowitz and Green would deal only in securities which were not on any lists of stolen securities and that Zelmanowitz intended resale through a brokerage firm. Moreover, although they were paid immediately upon delivery of the securities to Zelmanowitz and Green, there was testimony indicating that their receipts would be a certain percentage of the proceeds realized upon resale by the core conspirators, thus linking the success of their venture to the success of the conspiracy’s ultimate resale. The above was sufficient evidence upon which the jury could find that the Silvermans were members of the overall conspiracy.
Appellants also contend that the trial judge erred in refusing to instruct the jury that they should acquit appellants if they found separate conspiracies, rather than a single, overall conspiracy. An examination of the court’s charge satisfies us that this claim is without merit. The court stressed in its charge that the Government alleged a single conspiracy and that the Government must show that each defendant was a “knowing part” of this conspiracy. Moreover, the trial judge carefully instructed the jury that in determining whether a particular defendant was a member of the alleged conspiracy, they should consider only his acts and statements for he could not be bound by the acts or declarations of other participants until, it was established that a conspiracy existed and that he was a participant in it. The risk of guilt transference was thus properly minimized. See United States v. Morado, 454 F.2d 167, 172 (5th Cir.), cert. denied, 406 U.S. 917, 92 S.Ct. 1767, 32 L.Ed.2d 116 (1972); United States v. Calabro, 449 F.2d 885, 894 (2d Cir. 1971), cert. denied, 404 U.S. 1047, 92 S.Ct. 728, 30 L.Ed.2d 735, cert. denied, 405 U.S. 928, 92 S.Ct. 978, 30 L.Ed.2d 801 (1972); United States v. Aiken, 373 F.2d 294, 299 (2d Cir.), cert. denied, 389 U.S. 833, 88 S.Ct. 32, 19 L.Ed.2d 93 (1967).
Since we have found appellants’ other contentions to be without merit, the district court judgment and commitment orders will be affirmed.
. The court has considered and rejected the contentions of defendant Rossi (appellant in No. 73-1197) that:
(a) he was prejudiced by the joinder of offenses and defendants for trial together, and the trial judge erred in denying the numerous motions for severance of the defendants made prior to trial ;
(b) the trial judge erred in denying defendants’ application for mistrial subsequent to the severance of Anthony Salerno from the trial;
(c) subsequent to the severance of Anthony Salerno, there was a change of the elements of the crime charged, which constituted an improper amendment to the indictment ;
id) the trial judge erred in denying defendant’s motion for an order setting aside the verdict of the jury as to Count 1 and for entry of a judgment of acquittal, as the evidence established, at best, that the defendant merely sold to a conspiracy, and was insufficient to warrant his conviction on the conspiracy count;
(e) the trial judge erred in denying defendant’s motion for an order setting aside the verdict and for entry of a judgment of acquittal as there was a variance between the indictment, which charged a single, overall conspiracy, and the proof, which, at best, established several separate and distinct conspiracies ; and
(f) the trial judge should have instructed the jury on multiple conspiracies.
The court has also considered and rejected the contentions of defendants Howard and William Silverman (appellants in Nos. 73-1195 and 73-1196) that:
(a) the totality of the circumstances of the case denied appellants substantial due process of law and a fair and impartial speedy trial, as mandated by the Fifth and Sixth Amendments to the Constitution;
(b) it was prejudicial error for the trial judge to fail to instruct the jury, as requested by appellants, that the scope of the conspiracy count, as establishing one conspiracy or several, was for their determination;
(c) the proof established as a matter of law that the appellants Silverman were not members of the conspiracy alleged in the indictment;
(d) there was a material variance between the allegations of the conspiracy count and the proof submitted in support thereof, insofar as appellants Silverman are concerned ; and
(e) the failure to afford appellants a speedy trial violated their constitutional rights guaranteed by the Sixth Amendment to the Constitution.
Each appellant also expressly adopted the arguments of his co-appellants. The court has considered and rejected each of the above arguments insofar as it relates to each appellant.
. While the appeal in the present case was pending, the appellants filed a motion for remand to the district court so that the district court might pass upon a motion for a new trial based upon newly discovered evidence. This motion will be denied, since it is well-settled procedure that remand is proper only after the district court has ruled on such motion for a new trial. See United States v. Scott, 460 F.2d 45, 48 at n. 3 (3d Cir. 1972); United States v. Conway, 415 F.2d 158, 166 (3d Cir. 1969), cert. denied, 397 U.S. 994, 90 S.Ct. 1131, 25 L.Ed.2d 401 (1970); United States v. Frame, 454 F.2d 1136 (9th Cir.), cert. denied, 406 U.S. 925, 92 S.Ct. 1794, 32 L.Ed.2d 126 (1972).
Question: What is the most frequently cited title of the U.S. Code in the headnotes to this case? Answer with a number.
Answer:
|
songer_appnatpr
|
2
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "natural persons". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Robert J. STEINPREIS and Loraine Ison Steinpreis, Appellants, v. Kathryn J. Lawler SHOOK, F. Fendall Coughlin, Dorothy J. Beaver, Frank E. Hagan, Jr., Ralph W. Offutt and H. Ralph Miller, Appellees.
No. 10899.
United States Court of Appeals Fourth Circuit.
Argued March 8, 1967.
Decided April 7, 1967.
Robert J. Steinpreis (Loraine Ison Steinpreis on the brief), appellant, pro se.
Thomas P. Perkins, III, Asst. Atty. Gen., of Maryland, and Charles G. Dalrymple, Asst. County Atty., Montgomery County, Maryland (Francis B. Burch, Atty. Gen., of Maryland, and Robert G. Tobin, Jr., Asst. County Atty., Montgomery County, Maryland, on the brief), for appellees.
Before SOBELOFF, BOREMAN and J. SPENCER BELL, Circuit Judges.
Judge Bell participated in the hearing and concurred in the disposition of the case but died before the opinion was prepared.
PER CURIAM:
A controversy arising between a landlord and his tenant has burgeoned into the present massive suit by the unsuccessful tenant, who claims $1,000,000.-00 damages, not only against the landlord but also against the judges of the People’s Court, a judge of the reviewing court, the court clerks, and the county sheriff. No purpose would be served by an elaborate recital of the antecedent litigation. The present appeal is from an order of the District Court of the District of Maryland granting the officials’ motion to dismiss the complaint against them.
The complaint diffuses its charges over 48 pages andi 141 paragraphs, but may be briefly summarized. It alleges a conspiracy between Harry M. Leet, the landlord and principal defendant, and Kathryn J. Lawler Shook, Judge of the Circuit Court of Montgomery County, Frank E. Hagan, Jr., and Dorothy J. Beaver, Clerks of the People’s Court of Montgomery County and of the Silver Spring People’s Court respectively, and Ralph W. Offutt, Sheriff of Montgomery County, to wrongfully, fraudulently, and maliciously obtain judgments against the plaintiffs, and to evict them from the farm which they leased from Leet. Leet answered the complaint, and the remaining defendants — judges and court officers — moved to dismiss.
We have carefully considered the record, the briefs and oral arguments of the parties, including plaintiffs’ extensive reply brief and addendum. Plaintiffs have failed to allege any facts indicating that the defendant judges and other court officers acted in concert with each other or with Leet.
Moreover, with respect to the defendant judges, no facts are disclosed which would remove this case from the well-established rule that judges are absolutely immune from civil liability for any actions performed by them in their judicial capacity. Bradley v. Fisher, 80 U.S. 335, 20 L.Ed. 646 (1872); Eliason v. Funk, 233 Md. 351, 196 A.2d 887 (1964); Prosser, Torts, § 109 at 780 (2d ed. 1955). The courts of Maryland have consistently held that the “appropriate and only” remedy for an allegedly erroneous judgment by a justice of the peace is by appeal from that judgment. Roth v. Shupp, 94 Md. 55, 50 A. 430 (1901).
The court clerks, in issuing the writs of summons which brought the plaintiffs into court for the distraint of rent cases, acted in the performance of their duties under rules of the court which have the effect of law, and the same actions complained of here were authoritively declared valid in Steinpreis v. Leet, 240 Md. 212, 213 A.2d 555 (1965) and Steinpreis v. Miller, 241 Md. 79, 215 A.2d 737 (1966). Likewise the county sheriff, in levying distraints, serving summonses, and conducting a sheriff’s sale, was merely carrying out the routine functions of his office. These duties are mandatory. Md. Code Ann. Art. 87, §§ 5 & 11 (1964 Replacement Volume). All of the papers which the sheriff processed were on standard forms and under oath. There is no allegation that the sheriff made any improper or false return on any of the papers.
Finding no valid reason for disturbing the District Court’s order, it is
Affirmed.
. Suits were filed for successive installments of rent as they became due. There were seven suits altogether, resulting in judgments for the landlord for the amount of the rents; one such judgment was appealed to the Court of Appeals of Maryland and was there affirmed. Steinpreis v. Leet, 240 Md. 212, 213 A.2d 555 (1965). See also Steinpreis v. Miller, 241 Md. 79, 215 A.2d 737 (1966). A judgment was also obtained by the landlord ordering the tenants to vacate the leased farm. The particular cause of action sought to be enforced in the federal courts was not appealed to the Court of Appeals of Maryland, the tenants having chosen to treat the decisions of the Circuit Court of Montgomery County as a “total nullity.”
. Plaintiffs’ numerous citations are not helpful, for while they express general propositions beyond dispute, the factual situations are distinguishable.
Question: What is the total number of appellants in the case that fall into the category "natural persons"? Answer with a number.
Answer:
|
songer_two_issues
|
B
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine whether there are two issues in the case. By issue we mean the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
EARLE RESTAURANT, Inc. v. O’MEARA.
No. 9335.
United States Court of Appeals District of Columbia.
Argued Nov. 20, 1946.
Decided Feb. 24, 1947.
CLARK, Associate Justice, dissenting.
Mr. J. Harry Welch, of Washington, D. C., with whom Messrs. H. Mason Welch and John R. Daily, both of Washington, D. C., were on the brief, for appellant.
Mr. John H. Burnett, of Washington, D. C., with whom Mr. Arthur F. Carroll, Jr., of Washington, D. C., was on the brief, for appellee.
Before GRONER, Chief Justice, and CLARK and PRETTYMAN, Associate Justices.
PRETTYMAN, Associate Justice.
Appellee O’Meara was a musician in an orchestra in the Neptune Room of the Earle Restaurant.. She was injured there and brought a civil action against the Restaurant for negligence. The Restaurant answered that she was its employee and, therefore, limited to her claim under the Workmen’s Compensation Act. The case went to trial before a jury, and a verdict for Miss O’Meara was returned. From judgment on that verdict the Restaurant appeals.
Appellant’s first point relates to the exclusion from evidence of an alleged contract. Upon the trial,‘the Restaurant proffered a document purporting to be a contract o-f employment between it and Miss O’Meara. The court at first admitted the document over objection, but later granted a motion to strike it, upon the ground that the testimony did not show that Miss O’Meara knew anything about the contract except the fact that there was one. Then, upon authority of Williams v. United States, the court held that as a matter of law Miss O’Meara was an employee of the orchestra leader and not of the Restaurant.
The document in question was a printed form with blanks filled in. It purported to be a contract of employment between the Neptune Room, as employer, and Four Musicians “represented by the undersigned representative.” It was signed “By Consolidated Radio Artists, Inc. (Representatives of Employees) By Charles E. Green.” It recited that “the employees severally, through their representative, agree to render collectively to the employer services * * etc. It also recited that musicians performing under the contract must be members of the American Federation of Musicians, and all rules, laws and regulations of that Federation were made part of the agreement. The contract designated the leader of the orchestra as one of the Four Musicians, but imposed certain duties upon him “on behalf of the employer”, and provided for his signature as “Orchestra Leader”.
It was testified that Consolidated Radio Artists negotiated the contract; that it was “represented by the Musician’s Union”; that the form was one used by the American Federation of Musicians, and that this was the contract entered into by the Earle Restaurant for these musicians. Miss O’Meara explained that union rules provide for some sort of a written agreement, in triplicate, one copy for the union, one for the leader, and one for the “place you are playing in.” She said that the band, contract would have to be a union contract, that she had previously worked under this form of contract, but that she had not seen or signed this document. Her name, with those of the other musicians, was listed on the back of the contract, and the wages due each were listed.
On the facts thus shown, the document in question appears to be a contract of employment negotiated and executed by or for a union representing employees. Any contract is binding if executed by a duly-authorized agent, even if the principal did not see or sign it or know anything further about it. This contract appears to be one reached by a collective-bargaining process. To be sure, it is not an ordinary collective-bargaining contract, as that term is used currently to refer to labor union negotiations of general terms of employment, since this contract includes the terms of an actual engagement. But it purports to have been negotiated by a designated representative of a group of employees, and that is the distinguishing characteristic of collective bargaining. We know of no rule which prevents collective bargaining of actual individual employment, or any rule which makes invalid a contract thus negotiated and executed by a duly-authorized bargaining representative. There is no requirement that such a contract be seen or signed by each individual employee. If agreed to and signed by his or her duly-authorized collective-bargaining representative, it is a binding agreement of employment. Thus the document in the case at bar was admissible upon the facts shown. Of course, if it were shown that it is not what it purports to be, or is otherwise invalid or unauthorized, the answer might be to the contrary.
The contract involved in Williams v. United States, supra, differed from what the contract appears to be in the case at bar. There the Music Corporation appeared in the contract as “representing Griff Williams and His Orchestra”, called an “attraction” and referred to throughout the contract as an entity; the musicians were not severally named; they did not purportedly “severally agree.” It was specifically found by the court that the Music Corporation was a booking agency under agreement with Williams to act as the agent for him and the orchestra of which he was the leader; and that the amount paid by the establishment at which the attraction appeared, was a lump sum from which Williams was entitled to secure a profit after paying his musicians. Those and other facts of similar import led the Circuit Court of Appeals to hold that Williams was an employer. The difference between the facts in that case and those in the case before us is too obvious to require elaboration.
Similarly, in Spillson v. Smith, the orchestra was engaged as a unit, the contract was between the leader and the restaurant, and the sum paid was a lump sum. The contracts in Aberdeen Aerie No. 24, Etc. v. United States, Los Angeles Athletic Club v. United States, and Biltgen v. Reynolds were similar to those in the Williams and Spillson cases, supra. In Birmingham v. Bartels, however, the contract was similar to the one we have here, and the court reached a conclusion opposite to. those in the other cases mentioned and held the restaurant to be the employer. It is important in the present case to note that in every case mentioned the court considered the contract itself an important factor in the consideration. In the case before us, the question is whether the contract should have been admitted. In the view which we take, we do not attempt to weigh all the factors to determine whether the Restaurant was or was not Miss O’Meara’s employer. Our decision is that the contract was admi * ble.
If the contract is as it appears to be on the facts adduced, and as we have characterized it, the puzzling and confused features of the case appearing in the record become at once clear. Such, for example, are the leader’s status in the matter, the reference in the contract to the union rules, laws and regulations, the plaintiff’s testimony as to the leader’s activities, and the fact that she knew there was a contract but had never seen it. We think that the trial court was in error in granting the motion to strike the contract and thus denying it as evidence.
The judgment will be reversed with a direction to grant a new trial. We do not order a dismissal, because, while the contract may dispose of the case, the case was not tried upon the theory of a collective-bargaining contract, and, therefore, there may be evidence, not presented, which might indicate that the document is not what it appears to be or is unauthorized or otherwise invalid.
The trial court also declined to admit entries in the ledger of the Earle Restaurant, proffered by it “for the purpose of showing the relationship which existed between the parties which is in issue in this suit.” Appellant asserts error in that ruling. On the question posed by the proffer we agree with the trial court. These records, properly authenticated, were admissible under the Federal Shop Book Rule to prove specific acts, transactions, occurrences or events ; for example, in the present case, certain payments claimed to have been made by the Restaurant. But they are not admissible for the stated purpose of proving a relationship. For that purpose they are merely self-serving declarations. Whether, having proved certain acts by the books, counsel could argue that those acts prove a relationship, is a different matter. The difference may seem technical, but the Federal Shop Book Rule is specific.
We find no error in the other respects in which appellant asserts error. The instruction as to the inference of negligence is perhaps inartistic as it appears on the-printed record. In effect, however, the court said that the evidence was sufficient to justify an inference of negligence if the jury believed the evidence and determined that the inference was warranted; it specifically said that no presumption of negligence whatever arose from the mere happening of the accident.
Reversed with instructions to grant a new trial.
Longshoremen’s and Harbor Workers’ Compensation Act, 44 Stat. 1424, - 33 U. S.C.A. § 901 et seq., made applicable to the District of Columbia by the Act of May 17, ,1928, 45 Stat. 6OO, D.C.Code (1940) § 36 — 501.
7 Cir., 1942, 126 F.2d 129; the facts are more fully stated in the lower court’s opinion reported in D.C.N.D.Ill., 1941, 38 F.Supp. 536.
“Neptune Room”, being the name of a restaurant operated by appellant, was treated throughout the case as a trade name of appellant.
Aside from the fact that Consolidated Radio Artists, Inc., negotiated the contract and executed it as representative of the employees, the record does not show this concern’s place or authority in the matter. Apparently it was acting directly for the Musician’s Union.
A principal is presumed to know what his agent is doing and may be bound even by his misrepresentations. Bowen v. Mount Vernon Sav. Bank, 1939, 70 App. D.C. 273, 275, 276, 105 F.2d 796, 798, 799; Peyser v. Volsk, 1941, 74 App.D. C. 1, 119 F.2d 462 ; 2 Mechem, Agency (2d Ed.1914) §§ 1709, 1720.
It was pointed out in J. I. Case Co. v. Labor Board, 1944, 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762, that a collective-bargaining agreement does not usually go so far as to include actual terms of employment, and additional individual contracts of actual employment are usually necessary.
7 Cir., 1945, 147 F.2d 727.
D.C.WJD.Wash., 1943, 50 F.Supp. 734.
D.C.S.D.Cal., 1944, 54 F.Supp. 702.
D.C.Minn., 1943, 58 F.Supp. 909.
8 Cir., 1946, 157 F.2d 295.
The Federal Shop Book Rule, 28 U. S.C.A. § 695, spéeifically provides that the records, etc., of any act, transaction, said act, transaction, occurrence, or etc., shall be admissible “as evidence of event * * (Emphasis ours.)
Question: Are there two issues in the case?
A. no
B. yes
Answer:
|
sc_jurisdiction
|
A
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the manner in which the Court took jurisdiction. The Court uses a variety of means whereby it undertakes to consider cases that it has been petitioned to review. The most important ones are the writ of certiorari, the writ of appeal, and for legacy cases the writ of error, appeal, and certification. For cases that fall into more than one category, identify the manner in which the court takes jurisdiction on the basis of the writ. For example, Marbury v. Madison, 5 U.S. 137 (1803), an original jurisdiction and a mandamus case, should be coded as mandamus rather than original jurisdiction due to the nature of the writ. Some legacy cases are "original" motions or requests for the Court to take jurisdiction but were heard or filed in another court. For example, Ex parte Matthew Addy S.S. & Commerce Corp., 256 U.S. 417 (1921) asked the Court to issue a writ of mandamus to a federal judge. Do not code these cases as "original" jurisdiction cases but rather on the basis of the writ.
PORTLAND GOLF CLUB v. COMMISSIONER OF INTERNAL REVENUE
No. 89-530.
Argued April 17, 1990
Decided June 21, 1990
Blackmun, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Brennan, White, MARSHALL, and Stevens, JJ., joined, and in which O’Connor, Scalia, and Kennedy, JJ., joined except as to Parts III-B and IV. Kennedy, J., filed an opinion concurring in part and concurring in the judgment, in which O’Connor and Scalia, JJ., joined, post, p. 171.
Leonard J. Henzke, Jr., argued the cause for petitioner. With him on the briefs was Allen B. Bush.
Clifford M. Sloan argued the cause for respondent. On the brief were Solicitor General Starr, Assistant Attorney General Peterson, Deputy Solicitor General Wallace, Alan I. Horowitz, and Robert S. Pomerance.
Justice Blackmun
delivered the opinion of the Court.
This case requires us to determine the circumstances under which a social club, in calculating its liability for federal income tax, may offset losses incurred in selling food and drink to nonmembers against the income realized from its investments.
I
Petitioner Portland Golf Club is a nonprofit Oregon corporation, most of whose income is exempt from federal income tax under § 501(c)(7) of the Internal Revenue Code of 1954, 26 U. S. C. § 501(c)(7). Since 1914 petitioner has owned and operated a private golf and country club with a golf course, restaurant and bar, swimming pool, and tennis courts. The great part of petitioner’s income is derived from membership dues and other receipts from the club’s members; that income is exempt from tax. Portland Golf also has two sources of nonexempt “unrelated business taxable income”: sales of food and drink to nonmembers, and return on its investments.
The present controversy centers on Portland Golf’s federal income tax liability for its fiscal years ended September 30, 1980, and September 30, 1981, respectively. Petitioner received investment income in the form of interest in the amount of $11,752 for fiscal 1980 and in the amount of $21,414 for fiscal 1981. App. 18. It sustained net losses of $28,433 for fiscal 1980 and $69,608 for fiscal 1981 on sales of food and drink to nonmembers. Petitioner offset these losses against the earnings from its investments and therefore reported no unrelated business taxable income for the two tax years. In computing these losses, petitioner identified two different categories of expenses incurred in selling food and drink to nonmembers. First, petitioner incurred variable (or direct) expenses, such as the cost of food, which varied depending on the amount of food and beverages sold (and therefore would not have been incurred had no sales to nonmembers been made). For each year in question, petitioner’s gross income from nonmember sales exceeded these variable costs. Petitioner also included as an unrelated business expense a portion of the fixed (or indirect) overhead expenses of the club — expenses which would have been incurred whether or not petitioner had made sales to nonmembers. In determining what portions of its fixed expenses were attributable to nonmember sales, petitioner employed an allocation formula, described as the “gross-to-gross method,” based on the ratio that nonmember sales bore to total sales. When fixed expenses, so calculated, were added to petitioner’s variable costs, the total exceeded Portland Golf’s gross income from nonmember sales.
On audit, the Commissioner took the position that petitioner could deduct expenses associated with nonmember sales up to the amount of receipts from the sales themselves, but that it could not use losses from those activities to offset its investment income. The Commissioner based that conclusion on the belief that a profit motive was required if losses from these activities were to be used to offset income from other sources, and that Portland Golf had failed to show that its sales to nonmembers were undertaken with an intent to profit. The Commissioner therefore determined deficiencies of $1,828 for 1980 and $3,470 for 1981; these deficiencies reflected tax owed on petitioner’s investment income. App. 48-51.
Portland Golf sought redetermination in the Tax Court. That court ruled in petitioner’s favor. 55 TCM 212 (1988), ¶ 88,076 P-H Memo TC. The court assumed, without deciding, that losses incurred in the course of sales to nonmembers could be used to offset other nonexempt income only if the sales were undertaken with an intent to profit. The court, however, held that Portland Golf had adequately demonstrated a profit motive, since its gross receipts from sales to nonmembers consistently exceeded the variable costs associated with those activities. The court therefore held that “petitioner is entitled to offset its unrelated business taxable income from interest by its loss from its nonmember food and beverage sales computed by allocating a portion of its fixed expenses to the nonmember food and beverage sales activity in a manner which respondent agrees is acceptable.” Id., at 217, ¶ 88,076 P-H Memo TC, at 413.
The United States Court of Appeals for the Ninth Circuit remanded. App. to Pet. for Cert, la, judgt. order reported at 876 F. 2d 897 (1989). The Court of Appeals held that the Tax Court had applied an incorrect legal standard in determining that Portland Golf had demonstrated an intent to profit from sales to nonmembers. The appellate court relied on its decision in North Ridge Country Club v. Commissioner, 877 F. 2d 750 (1989), where it had ruled that a social club “can properly deduct losses from a non-member activity only if it undertakes that activity with the intent to profit, where profit means the production of gains in excess of all direct and indirect costs.” Id., at 756. The same court in the present case concluded: “Because Portland Golf Club could have reported gains in excess of direct and indirect costs, but did not do so, relying on a method of allocation stipulated to be reasonable by the Commissioner, we REMAND this case to the tax court for a determination of whether Portland Golf Club engaged in its non-member activities with the intent required under North Ridge to deduct its losses from those activities.” App. to Pet. for Cert. 2a-3a.
Because of a perceived conflict with the decision of the Sixth Circuit in Cleveland Athletic Club, Inc. v. United States, 779 F. 2d 1160 (1985), and because of the importance of the issue, we granted certiorari. 493 U. S. 1041 (1990).
I — i I — i
Virtually all tax-exempt business organizations are required to pay federal income tax on their “unrelated business taxable income.” The law governing social clubs, however, is significantly different from that governing other tax-exempt entities. As to exempt organizations other than social clubs, the Code defines “unrelated business taxable income” as “the gross income derived by any organization from any unrelated trade or business (as defined in section 513) regularly carried on by it, less the deductions allowed by this chapter which are directly connected with the carrying on of such trade or business.” 26 U. S. C. § 512(a)(1). As to social clubs, however, “unrelated business taxable income” is defined as “the gross income (excluding any exempt function income), less the deductions allowed by this chapter which are directly connected with the production of the gross income (excluding exempt function income).” § 512(a)(3)(A). The salient point is that § 512(a)(1) (which applies to most exempt organizations) limits “unrelated business taxable income” to income derived from a “trade or business,” while § 512(a)(3)(A) (which applies to social clubs) contains no such limitation. Thus, a social club’s investment income is subject to federal income tax, while the investment income of most other exempt organizations is not.
This distinction reflects the fact that a social club’s exemption from federal income tax has a justification fundamentally different from that which underlies the grant of tax exemptions to other nonprofit entities. For most such organizations, exemption from federal income tax is intended to encourage the provision of services that are deemed socially beneficial. Taxes are levied on “unrelated business income” only in order to prevent tax-exempt organizations from gaining an unfair advantage over competing commercial enterprises. See United States v. American College of Physi cians, 475 U. S. 834, 838 (1986) (“Congress perceived a need to restrain the unfair competition fostered by the tax laws”). Since Congress concluded that investors reaping tax-exempt income from passive sources would not be in competition with commercial businesses, it excluded from tax the investment income realized by exempt organizations.
The exemption for social clubs rests on a totally different premise. Social clubs are exempted from tax not as a means of conferring tax advantages, but as a means of ensuring that the members are not subject to tax disadvantages as a consequence of their decision to pool their resources for the purchase of social or recreational services. The Senate Report accompanying the Tax Reform Act of 1969, 83 Stat. 536, explained that that purpose does not justify a tax exemption for income derived from investments:
“Since the tax exemption for social clubs and other groups is designed to allow individuals to join together to provide recreational or social facilities or other benefits on a mutual basis, without tax consequences, the tax exemption operates properly only when the sources of income of the organization are limited to receipts from the membership. Under such circumstances, the individual is in substantially the same position as if he had spent his income on pleasure or recreation (or other benefits) without the intervening separate organization. However, where the organization receives income from sources outside the membership, such as income from investments . . . upon which no tax is paid, the membership receives a benefit not contemplated by the exemption in that untaxed dollars can be used by the organization to provide pleasure or recreation (or other benefits) to its membership. ... In such a case, the exemption is no longer simply allowing individuals to join together for recreation or pleasure without tax consequences. Rather, it is bestowing a substantial additional advantage to the members of the club by allowing tax-free dollars to be used for their personal recreational or pleasure purposes. The extension of the exemption to such investment income is, therefore, a distortion of its purpose.” S. Rep. No. 91-552, p. 71 (1969).
In the Tax Reform Act of 1969, Congress extended the tax on “unrelated business income” to social clubs. As to these organizations, however, Congress defined “unrelated business taxable income” to include income derived from investments. Our review of the present case must therefore be informed by two central facts. First, Congress intended that the investment income of social clubs should be subject to federal tax, and indeed Congress devised a definition of “unrelated business taxable income” with that purpose in mind. Second, the statutory scheme for the taxation of social clubs was intended to achieve tax neutrality, not to provide these clubs a tax advantage: Even the exemption for income derived from members’ payments was designed to ensure that members are not disadvantaged as compared with persons who pursue recreation through private purchases rather than through the medium of an organization.
h-i I — I
Petitioner’s principal argument is that it may deduct losses incurred through sales to nonmembers without demonstrating that these sales were motivated by an intent to profit. In the alternative, petitioner contends (and the Tax Court agreed) that if the Code does impose a profit-motive requirement, then that requirement has been satisfied in this case. We address these arguments in turn.
A
We agree with the Commissioner and the Court of Appeals that petitioner may use losses incurred in sales to nonmem-; bers to offset investment income only if those sales were motivated by an intent to profit. The statute provides that, as to social clubs, “the term ‘unrelated business taxable income’ means the gross income (excluding any exempt function income), less the deductions allowed by this chapter which are directly connected with the production of the gross income (excluding exempt function income). ” § 512(a)(3)(A) (emphasis added). As petitioner concedes, the italicized language limits deductions from unrelated business income to expenses allowable as deductions under Chapter 1 of the Code. See Brief for Petitioner 21-22. In our view, the deductions claimed in this case — expenses for food, payroll, and overhead in excess of gross receipts from nonmember sales — are allowable, if at all, only under § 162 of the Code. See North Ridge Country Club v. Commissioner, 877 F. 2d, at 753; Brook, Inc. v. Commissioner, 799 F. 2d 833, 838 (CA2 1986). Section 162(a) provides a deduction for “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” Although the statute does not expressly require that a “trade or business” must be carried on with an intent to profit, this Court has ruled that a taxpayer’s activities fall within the scope of § 162 only if an intent to profit has been shown. See Commissioner v. Groetzinger, 480 U. S. 23, 35 (1987) (“[T]o be engaged in a [§ 162] trade or business, . . . the taxpayer’s primary purpose for engaging in the activity must be for income or profit”). Thus, the losses that Portland Golf incurred in selling food and drink to nonmembers will constitute “deductions allowed by this chapter” only if the club’s nonmember sales were performed with an intent to profit.
We see no basis for dispensing with the profit-motive requirement in the present case. Indeed, such an exemption would be in considerable tension with the statutory scheme devised by Congress to govern the taxation of social clubs. Congress intended that the investment income of social clubs (unlike the investment income of most other exempt organizations) should be subject to the same tax consequences as the investment income of any other taxpayer. To allow such an offset for social clubs would run counter to the principle of tax neutrality which underlies the statutory scheme.
Petitioner concedes that “[generally a profit motive is a necessary factor in determining whether an activity is a trade or business.” Brief for Petitioner 23. Petitioner contends, however, that by including receipts from sales to nonmembers within § 512(a)(3)(A)’s definition of “unrelated business taxable income,” the Code has defined nonmember sales as a “trade or business,” and has thereby obviated the need for an inquiry into the taxpayer’s intent to profit. We disagree. In our view, Congress’ use of the term “unrelated business taxable income” to describe all receipts other than payments from the members hardly manifests an intent to define as a “trade or business” activities otherwise outside the scope of § 162. Petitioner’s reading would render superfluous the words “allowed by this chapter” in § 512(a)(3)(A): If each taxable activity of a social club is “deemed” to be a trade or business, then all of the expenses “directly connected” with those activities would presumably be deductible. Moreover, Portland Golf’s interpretation ignores Congress’ general intent to tax the income of social clubs according to the same principles applicable to other taxpayers. We therefore conclude that petitioner may offset losses incurred in sales to nonmembers against investment income only if its nonmember sales are motivated by an intent to profit.
B
Losses from Portland Golf’s sales to nonmembers may be used to offset investment income only if those activities were undertaken with a profit motive — that is, an intent to generate receipts in excess of costs. The parties and the other courts in this case, however, have taken divergent positions as to the range of expenses that qualify as costs of the nonexempt activity and are to be considered in determining whether petitioner acted with the requisite profit motive. In the view of the Tax Court, petitioner’s profit motive was established by the fact that the club’s receipts from nonmember sales exceeded its variable costs. Since Portland Golf’s fixed costs, by definition, have been incurred even in the absence of sales to nonmembers, the Tax Court concluded that these costs should be disregarded in determining petitioner’s intent to profit.
The Commissioner has taken no firm position as to the precise manner in which Portland Golf’s fixed costs are to be allocated between member and nonmember sales. Indeed, the Commissioner does not even insist that any portion of petitioner’s fixed costs must be attributed to nonmember activities in determining intent to profit. He does insist, however, that the same allocation method is to be used in determining petitioner’s intent to profit as in computing its actual profit or loss. See Brief for Respondent 44-46. In the present case the parties have stipulated that the gross-to-gross method provides a reasonable formula for allocating fixed costs, and Portland Golf has used that method in calculating the losses incurred in selling food and drink to nonmembers. The Commissioner contends that petitioner is therefore required to demonstrate an intent to earn gross receipts in excess of fixed and variable costs, with the allocable share of fixed costs being determined by the gross-to-gross method.
Although the Court of Appeals’ opinion is not entirely clear on this point, see n. 8, supra, that court seems to have taken a middle ground. The Court of Appeals expressly rejected the Tax Court’s assertion that profit motive could be established by a showing that gross receipts exceeded variable costs; the court insisted that some portion of fixed costs must be considered in determining intent to profit. The court appeared, however, to leave open the possibility that Portland Golf could use the gross-to-gross method in calculating its actual losses, while using some other allocation method to demonstrate that its sales to nonmembers were undertaken with a profit motive.
We conclude that the Commissioner’s position is the correct one. Portland Golf’s argument rests, as the Commissioner puts it, on an “inherent contradiction.” Brief for Respondent 44. Petitioner’s calculation of actual losses rests on the claim that a portion of its fixed expenses is properly regarded as attributable to the production of income from nonmember sales. Given this assertion, we do not believe that these expenses can be ignored (or, more accurately, attributed to petitioner’s exempt activities) in determining whether petitioner acted with the requisite intent to profit. Essentially the same criticism applies to the Court of Appeals’ approach. That court required petitioner to include some portion of fixed expenses in demonstrating its intent to profit, but it left open the possibility that petitioner could employ an allocation method different from that used in calculating its actual losses. Under that approach, some of petitioner’s fixed expenses could be attributed to exempt functions in determining intent to profit and to nonmember sales in establishing the club’s actual loss. This, like the rationale of the Tax Court, seems to us to rest on an “inherent contradiction.”
Petitioner’s principal response is that § 162 requires an intent to earn an economic profit, and that this is quite different from an intent to earn taxable income. Portland Golf emphasizes that numerous provisions of the Code establish deductions and preferences which do not purport to mirror economic reality. Therefore, petitioner argues, taxpayers may frequently act with an intent to profit, even though the foreseeable (and, indeed, the intended) result of their efforts is that they suffer (or achieve) tax losses. Much of the Code, in petitioner’s view, would be rendered a nullity if the mere fact of tax losses sufficed to show that a taxpayer lacked an intent to profit, thereby rendering the deductions unavailable. In Portland Golf’s view, the parties have stipulated only that the gross-to-gross formula provides a reasonable method of determining what portion of fixed expenses is “directly connected” with the nonexempt activity for purposes of computing taxable income. That stipulation, Portland Golf contends, is irrelevant in determining the portion of fixed expenses that represents the actual economic cost of the activity in question.
We accept petitioner’s contention that § 162 requires only an intent to earn an economic profit. We acknowledge, moreover, that many Code provisions are designed to serve purposes (such as encouragement of certain types of investment) other than the accurate measurement of economic income. A taxpayer who takes advantage of deductions or preferences of that kind may establish an intent to profit even though he has no expectation of realizing taxable income. The fixed expenses that Portland Golf seeks to allocate to its nonmember sales, however, are deductions of a different kind. The Code does not state that fixed costs are allocable on a gross-to-gross basis irrespective of economic reality. Rather, petitioner’s right to use the gross-to-gross method rests on the club’s assertion that this allocation formula reasonably identifies those expenses that are “directly connected” to the nonmember sales, § 512(a)(3)(A), and are “the ordinary and necessary expenses paid or incurred” in selling food and drink to nonmembers, see § 162(a). Language such as this, it seems to us, reflects an attempt to measure economic income — not an effort to use the tax law to serve ancillary purposes. Having calculated its actual losses on the basis of the gross-to-gross formula, petitioner is therefore foreclosed from attempting to demonstrate its intent to profit by arguing that some other allocation method more accurately reflects economic reality.
IV
We hold that any losses incurred as a result of petitioner’s nonmember sales may be offset against its investment income only if the nonmember sales were undertaken with an intent to profit. We also conclude that in demonstrating the requisite profit motive, Portland Golf must employ the same method of allocating fixed expenses as it uses in calculating its actual loss. Petitioner has failed to show that it intended to earn gross income from nonmember sales in excess of its total (fixed plus variable) costs, where fixed expenses are allocated using the gross-to-gross method. The judgment of the Court of Appeals is therefore affirmed.
It is so ordered.
Section 501(c)(7) grants an exemption from federal income tax to “[c]lubs organized for pleasure, recreation, and other nonprofitable purposes, substantially all of the activities of which are for such purposes and no part of the net earnings of which inures to the benefit of any private shareholder.”
Section 511 of the Code provides that the “unrelated business taxable income” of an exempt organization shall be taxed at the ordinary corporate rate. The term “unrelated business taxable income,” as applied to the income of a club such as petitioner, is defined in § 512(a)(3)(A). That definition encompasses all sources of income except receipts from the club’s members.
For 1980, gross receipts from nonmember sales in the bar and dining room totaled $84,422, while variable expenses were $61,821. For 1981, gross receipts totaled $106,547, while variable expenses were $78,407. App. 85.
For example, if 10% of petitioner’s gross receipts were derived from nonmember sales, 10% of petitioner’s fixed costs would be allocated to the nonexempt activity. That method of allocation appears rather generous to Portland Golf. The club charges nonmembers higher prices for food and drink than members are charged, even though nonmembers' meals presumably cost no more to prepare and serve. It therefore seems likely that the gross-to-gross method overstates the percentage of fixed costs properly attributable to nonmember sales. The parties, however, stipulated that this allocation method was reasonable. Id., at 17.
The following table shows petitioner’s losses when fixed costs are allocated using the gross-to-gross method:
1980 1981
Gross income $84,422 $106,547
Variable expenses (61,821) (78,407)
Allocated fixed expenses (51,034) (97,748)
Net loss ($28,433) ($69,608)
It is of interest to note that if petitioner’s fixed costs had been allocated using an alternative formula, known as the “square foot and hours of actual use” method, see id., at 29, its gross receipts exceeded the sum of variable and allocated fixed costs for both years:
1980 1981
Gross income $84,422 $106,547
Variable expenses (61,821) (78,407)
Allocated fixed expenses (3,153) (4,666)
Net profit $19,448 $23,474
The general rule under the Code is that losses incurred in a profit-seeking venture may be deducted from unrelated income; expenses of a not-for-profit activity may be offset against the income from that activity, but losses may not be applied against income from other sources. See 1 B. Bittker & L. Lokken, Federal Taxation of Income, Estates and Gifts ¶¶20.1.2, 22.5.4, pp. 20-6, 22-63 to 22-64 (2d ed. 1989).
The Tax Court stated that Portland Golf “did intend to make a profit, and did make a profit between the amount received from sales to nonmembers and the costs related to those sales which would not have been incurred absent those sales.” 55 TCM, at 216, 188,076 P-H Memo TC, at 416. The Tax Court, in articulating this standard for determining whether intent to profit had been shown, relied on its earlier reviewed decision in North Ridge Country Club v. Commissioner, 89 T. C. 563 (1987). That decision subsequently was reversed. 877 F. 2d 750 (CA9 1989).
The basis for the Court of Appeals’ remand order is not entirely clear to us. It appears, however, that the court left open the possibility that petitioner could establish its intent to profit by using some other method of allocating fixed costs (such as the “actual use” method, see n. 5, supra), while continuing to use the gross-to-gross formula in computing actual losses. Both parties interpret the Court of Appeals’ decision in this manner, and both express disapproval of that approach. See Brief for Respondent 47, n. 25 (“[T]his argument is untenable”); Brief for Petitioner 48 (“While the Ninth Circuit’s formula is better than that of the Government, it is basically unprincipled”). Our disposition of the case makes unnecessary precise interpretation of the Court of Appeals’ opinion.
See also Brook, Inc. v. Commissioner, 799 F. 2d 833 (CA2 1986); Rev. Rui. 81-69, 1981-1 Cum. Bull. 351-352; A. Scialabba, The Unrelated Business Taxable Income of Social Clubs, 10 Campbell L. Rev. 249 (1988).
Section 513(a) defines “unrelated trade or business” as “any trade or business the conduct of which is not substantially related ... to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption.”
Section 512(a)(3)(B) defines “exempt function income” as “the gross income from dues, fees, charges, or similar amounts paid by members of the organization as consideration for providing such members or their dependents or guests goods, facilities, or services in furtherance of the purposes constituting the basis for the exemption of the organization to which such income is paid.”
See S. Rep. No. 2375, 81st Cong., 2d Sess., 28 (1950) (“The problem at which the tax on unrelated business income is directed is primarily that of unfair competition. The tax-free status of [these] organizations enables them to use their profits tax-free to expand operations, while their competitors can expand only with the profits remaining after taxes”); H. R. Rep. No. 2319, 81st Cong., 2d Sess., 36 (1950). The tax on “unrelated business income” was added to the Code by the Revenue Act of 1950, ch. 994, 64 Stat. 906.
See S. Rep. No. 2375, at 30-31; H. R. Rep. No. 2319, at 38.
Portland Golf appears to concede this point, too. See Brief for Petitioner 10 (“The parties agree that all of the expenses in issue . . . are the types of corporate expenses allowed as deductions by Code Section 162”). Petitioner does not identify any other Code provision which would serve as a basis for the deduction claimed in this case.
Section 183 of the Code permits a taxpayer to offset expenses incurred in a not-for-profit activity against income from that activity up to the amount of the income. Even before the enactment of § 183, moreover, the courts and the Commissioner had not required that revenues earned in activities showing a net loss be declared as taxable income. See 1 Bittker & Lokken, n. 6, supra, ¶22.5.4, p. 22-63. Although § 183 is inapplicable to a nonprofit corporation such as Portland Golf, the Commissioner has followed longstanding tax principles in permitting the deduction of expenses incurred in nonmember sales up to the amount of petitioner’s receipts. See Brief for Respondent 33. At issue in this case is petitioner's right to offset losses from nonmember sales against income from unrelated investments.
The Code distinguishes a social club’s “exempt function income” from its “unrelated business taxable income” by looking to the source of the payment: “[EJxempt function income” is limited to money received from the members. § 512(a)(3)(B). However, a social club could easily organize events whose primary purpose was to benefit the membership, yet arrange for nonmembers to make modest contributions toward the cost of the events. Those contributions would constitute “unrelated business taxable income”; but if losses incurred in such activities could be used to offset investment income, it would be relatively easy for clubs to avoid taxation on their investments.
The general rule that losses incurred in a not-for-profit activity may not be used to offset unrelated income rests on the recognition that one who incurs expenses without an intent to profit presumably derives some intrinsic pleasure or benefit from the activity. The Code’s limitation on deductibility (expenses may be deducted up to, but not above, the gross income produced by the activity) reflects the view that taxpayers should not be allowed to deduct what are, in essence, personal expenses simply because the activity in question generates some receipts. Just as an individual taxpayer may not offset personal expenses against income from other sources, a social club should not be allowed to deduct expenses incurred for the benefit of the membership from unrelated business income.
The parties stipulated that the gross-to-gross formula was a reasonable method of allocating fixed expenses. App. 17. In his brief to this Court, however, the Commissioner states: “There may be room to debate whether the fixed costs allocated by petitioner to its nonmember sales constitute true economic costs of that activity that ought to be treated as ‘directly connected’ to the production of the nonmember sales income. It might be argued that only the variable costs are ‘directly connected with’ the nonmember activity, and therefore that only those variable costs should offset the gross receipts from the nonmember income." Brief for Respondent 45, n. 24.
See n. 8, supra. The Tax Court noted that petitioner would have shown a profit on sales to nonmembers in both 1980 and 1981 if fixed costs had been allocated under the “actual use” method. See 55 TCM 212, 213 (1988), ¶ 88,076 P-H Memo TC 412, 413.
The Tax Court consistently has held that the possibility of realizing tax benefits should be disregarded in determining whether an intent to earn an economic profit has been shown. (That is, the reduction in tax liability cannot itself be the “profit.”) See, e. g., Gefen v. Commissioner, 87 T. C. 1471, 1490 (1986) (“A transaction has economic substance and will be recognized for tax purposes if the transaction offers a reasonable opportunity for economic profit, that is, profit exclusive of tax benefits”); Seaman v. Commissioner, 84 T. C. 564, 588 (1985) (‘“[PJrofit' means economic profit, independent of tax savings”); Surloff v. Commissioner, 81 T. C. 210, 233 (1983) (same). Accord, Simon v. Commissioner, 830 F. 2d 499, 500 (CA3 1987). Portland Golf does not dispute this principle. See Brief for Petitioner 39 (“The cases have uniformly held that taxable businesses, in order to deduct expenses in excess of income, need only show an ‘economic profit’ independent of tax savings, or ‘economic gain’ independent of tax savings”) (footnotes omitted). We therefore assume, without deciding, that potential reductions in tax liability are irrelevant to the determination whether a profit motive exists.
As stated earlier, § 512(a)(3)(A) limits deductions from unrelated business taxable income to “deductions allowed by this chapter.” In the present case, petitioner may offset losses from nonmember sales against investment income only if those losses are deductible under § 162. That Code provision states: “There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” Thus, the expenses petitioner seeks to deduct will constitute “deductions allowed by this chapter” only if they are “the ordinary and necessary expenses paid or incurred” in selling food and drink to nonmembers.
We do not hold that, for other cases, any particular method of allocating fixed expenses must be used by social clubs. We hold only that the allocation method used in determining actual profit or loss must also be used in determining whether the taxpayer acted with a profit motive. Petitioner here has stipulated, however, to the reasonableness of the gross-to-gross method and has used that method in calculating its actual losses. We note that no other allocation method, used consistently, would have produced a result more favorable to petitioner. Had petitioner employed the actual-use method, or ignored fixed costs entirely, it could have established its intent to profit, but it would have realized a net gain from nonmember sales and its “unrelated business taxable income” would have been higher.
The fact that petitioner suffered actual losses in 1980 and 1981 does not, by itself, prove that Portland Golf lacked a profit motive. A taxpayer's intent to profit is not disproved simply because no profit is realized during a particular year. See Treas. Reg. § 1.183 — l(c)(l)(ii), 26 CFR § 1.183 — l(c)(l)(ii) (1989) (most activities presumed to be engaged in for profit if gross income exceeds costs in any two of five consecutive years); Treas. Reg. § 1.183-2(b)(6), 26 CFR § L183-2(b)(6) (1989) (“A series of
Question: What is the manner in which the Court took jurisdiction?
A. cert
B. appeal
C. bail
D. certification
E. docketing fee
F. rehearing or restored to calendar for reargument
G. injunction
H. mandamus
I. original
J. prohibition
K. stay
L. writ of error
M. writ of habeas corpus
N. unspecified, other
Answer:
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songer_initiate
|
A
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What follows is an opinion from a United States Court of Appeals. Your task is to identify what party initiated the appeal. For cases with cross appeals or multiple docket numbers, if the opinion does not explicitly indicate which appeal was filed first, assumes that the first litigant listed as the "appellant" or "petitioner" was the first to file the appeal. In federal habeas corpus petitions, consider the prisoner to be the plaintiff.
Clifton L. GOODRICH, Petitioner, v. U. S. DEPARTMENT OF THE NAVY and Merit Systems Protection Board, Respondents.
No. 81-1344.
United States Court of Appeals, Third Circuit.
Submitted Under Third Circuit Rule 12(6) July 30, 1982.
Decided Aug. 4, 1982.
Charles A. Hobbie, Staff Counsel, Washington, D. C., Gay Snyder, Staff Counsel, New York City, James R. Rosa, Gen. Counsel, American Federation of Government Employees, AFL-CIO, Washington, D. C., for petitioner.
W. Hunt Dumont, U. S. Atty., Jerome B. Simandle, Asst. U. S. Atty., Trenton, N. J., M. Susan Burnett, Trial Atty., Litigation, Dept, of the Navy, Washington, D. C., for respondents.
Before GIBBONS, MARIS and GARTH, Circuit Judges.
OPINION OF THE COURT
GIBBONS, Circuit Judge.
This case comes before us on a petition for review of a final order of the Merit Systems Protection Board (MSPB) dismissing petitioner’s appeal for lack of subject matter jurisdiction. We set aside the MSPB’s decision that it had no jurisdiction and remand to the MSPB for further proceedings.
I.
The petitioner, Clifton L. Goodrich, is a Grounds Foreman at the Earle Naval Weapons Station in Colts Neck, New Jersey. On January 23, 1980, Goodrich received a memorandum notifying him that his position was being downgraded from Grade 5, Step 5 to Grade 2, with no step, effective January 27,1980. Attached to the memorandum was a copy of Standard Form 50, Notification of Personnel Action, which described the classification change and notified Goodrich that he was entitled to grade and pay retention for a two year period until January 26, 1982. No reason for the reclassification was given in either the memo or Standard Form 50.
On February 8, 1980 Goodrich appealed his reclassification to the MSPB. On May 16,1980, at a hearing limited to the issue of the MSPB’s jurisdiction, Goodrich argued first, that the action against him constituted an “adverse action” which was appealable under 5 U.S.C. § 7513(d) ; second, that the agency had committed a prohibited personnel practice under 5 U.S.C. § 2302(b) by failing to provide him with either the procedural protections of § 7513 or the information relied on by the agency in making the reclassification decision; and third, that he was not given adequate notice as to the reasons for his reclassification and was thereby precluded from opposing it. See Admin. Record at 42-43. The Department of the Navy (the agency) contended that it was ordered to undertake the reclassification, along with other classification actions, as a result of a directive from the agency’s Personnel Management Evaluation Office. Goodrich was entitled to retained grade and pay, and the agency argued that the downgrading was therefore not an adverse action. The MSPB’s Presiding Official on June 4, 1980 entered a decision dismissing the appeal for lack of jurisdiction on the ground that a reclassification with retained grade and pay is not an adverse action and is not appealable to the MSPB under 5 U.S.C. § 7513. The MSPB decision relied on section 5366(b), which provides:
For purposes of any appeal procedures ... or any grievance procedure negotiated under the provisions of chapter 71 of this title—
(1) any action which is the basis of an individual’s entitlement to benefits under this subchapter, and
(2) any termination of any such benefits under this subchapter,
shall not be treated as appealable under such appeals procedures or grievable under such grievance procedures.
5 U.S.C. § 5366(b). Goodrich thereupon filed a petition for review with the MSPB’s Office of the Secretary, which on October 6, 1980 entered an order denying the petition. On February 17, 1981 Goodrich wrote to the MSPB requesting that it reopen his case because the agency had denied him due process and had deliberately withheld information from the Presiding Official at Goodrich’s hearing before the MSPB. App. 2. The MSPB responded by letter on May 13, 1981, informing Goodrich that its October 6, 1980 Order was final. App. 6. Thereafter, Goodrich on March 3,1981 filed his petition for review in this court.
II.
The critical issue involved in this appeal is whether the MSPB properly determined that it was without jurisdiction to consider an appeal from an agency decision to downgrade an employee, when the employee is entitled to retained grade and pay. Since a federal employee’s procedural rights are governed in part by the nature of the agency action taken against him, we must examine the reasons behind the downgrade of Goodrich’s position.
A.
The classification of a position is the standard by which an employee’s compensation, benefits and other personnel decisions are made. Under the Civil Service Reform Act of 1978 (the Act), a federal agency is allowed to change the government service grade of positions within its administration. 5 U.S.C. § 5107. Where a position is lowered in grade through no fault of an employee, however, the Act permits the employee to retain the higher grade for a two year period for the purpose of determining compensation and fringe benefits. 5 U.S.C. § 5362. In addition, at the end of the two year period, pursuant to 5 U.S.C. § 5363, the employee is entitled to retain the basic rate of pay of his former position. Although the downgraded employee retains his basic rate of pay, he does forego periodic salary increases and other benefits enjoyed by employees at the former grade of his position.
In Atwell v. MSPB, 670 F.2d 272 (D.C.Cir.1981), the District of Columbia Circuit held that Congress intended to preclude appeals to the MSPB of individual downgradings following reclassification where grade and pay retention are available to the employee. Id. at 282. The court, after conducting a thorough examination of the statutory scheme of the Act and its legislative history, concluded that the Act expanded the pay and grade retention benefits which were available prior to the Act, and as a quid pro quo for these rights, Congress intended to eliminate the right of downgraded employees to appeal the individual downgrading decision. Id. at 279.
The Atwell decision construed two arguably conflicting provisions of the Act. Section 7512 explicitly provides that reductions in grade are appealable actions. 5 U.S.C. § 7512. See note 3, supra. Section 5366(b), however, provides that “any action which is the basis of an individual’s entitlement [to grade and pay retention benefits] ...” is not an appealable action. The Atwell court reconciled these two provisions by reading section 5366 as a limitation on section 7512(3):
[T]he effect of section 5366 is to preclude individual appeals of downgradings made pursuant to position classifications. We conclude that, where pay and grade retention are provided, the downgrades suffered by petitioners are not the sort of “reductions in grade” contemplated under section 7512(3).... [W]e believe that the Congress intended that only those reductions that do not give rise to retention benefits should be appealable. Accordingly, a more accurate phrasing of section 7512(3) to achieve this end would have been “reduction in grade without grade and pay retention.”
670 F.2d at 286. The court thus held that the MSPB had no jurisdiction to hear an appeal by individual employees whose grades were reduced as a result of reclassification and downgrading. While we agree with the analysis and construction of the Act reached by the court in Atwell, it does not control this case. The Atwell case dealt with the reclassification and downgrading of employees because of the application of revised classification standards or the correction of classification errors. According to the court’s examination of the legislative history and construction of the Act, such actions are governed, not by the appellate procedures established by section 7512(3), but by the explicit limitation of section 5366.
In this ease, however, Goodrich argues that he was reduced in grade pursuant to a reduction in the agency’s workforce, and not because of a correction in his classification. Such actions against an employee, Goodrich contends, in spite of retained grade and pay, give rise to a right of appeal to the MSPB in the affected employee. The Atwell court itself recognized that grade retention benefits alone are not dis-positive of the existence of a right to appeal a downward classification to the MSPB, 670 F.2d at 280, and that, under other circumstances, the MSPB might have jurisdiction over such an appeal. We now turn to those other circumstances.
B.
Section 5366(a)(2) provides:
(a)(2) Nothing in this subchapter shall be construed to affect the right of any employee to appeal— ******
(B) under procedures prescribed by the Office of Personnel Management, any reduction-1 n-force action.
5 U.S.C. § 5366(a)(2) (emphasis added). In addition, section 5366(b), the statutory provision at issue in Atwell, explicitly excludes appeals from reduction-in-force actions from its limitation on appellate rights. The construction of § 5366(b) reached in Atwell thus does not control an individual’s right of appeal to the MSPB when he is affected by a reduction-in-force.
There is no dispute that an employee reduced in grade due to a reduction-in-force may be entitled to retention of his grade and pay in the same manner as an employee demoted due to a classification correction. 5 U.S.C. § 5362. The jurisdiction of the MSPB over an appeal from a reduction in grade depends, therefore, not on the availability of grade and pay retention, but on the nature of the demotion action taken against the affected employee.
Under the construction reached in Atwell, Congress intended that the expanded pay and grade retention benefits available to employees reduced in grade operate as a quid pro quo for appeals by employees whose demotion resulted from classification corrections. Employees demoted as a result of reduction-in-force, however, retain their right under Section 7512 to appeal to the MSPB.
III.
The factual question remains whether Goodrich was reduced in grade pursuant to a reclassification or a reduction-in-force. In his supplemental brief on appeal, Goodrich vigorously argues that he was demoted due to a gradual erosion of his duties resulting in classification of his position at a lower grade. (Supplemental Brief at 7-9). He contends that, according to agency regulations, reduction-in-force procedures must be followed by an agency when it reduces an employee in grade for reasons of reorganization due to erosion of the workforce. The agency concedes that a reduction-in-force demotion gives rise to a right of appeal to the MSPB, and does not deny that Goodrich was demoted due to a reduction-in-force (Respondents’ Brief at 14), but instead urges this court to hold that Goodrich did not raise his reduction-in-force argument at the administrative level, and that he is therefore precluded from relying on that argument in this court. We address each of these contentions in turn.
A.
When the MSPB held the hearing on the jurisdictional issue, the only evidence before it relevant to the nature of the reasons for Goodrich’s downgrade was the Standard Form 50, attached to the memorandum to Goodrich informing him of the classification change. The Standard Form 50 contains the cryptic statement “action taken in accordance with NFD LTR of 2 Nov. 1979.” Other than that one phrase, there is no indication in the information supplied to Goodrich as to the reasons for the downgrade. After Goodrich filed his appeal with the MSPB, the Presiding Official sent the agency a Request for the Production of Documents which specifically demanded “evidence supporting the action taken” and “response to material issues raised by the appellant.” Admin. Record at 22-23. The agency accordingly sent to the MSPB a copy of Goodrich’s job description, the Standard Form 50, and an unsigned, undated document titled “Case No. 17.” This document in its entirety states:
The Station response states the review and need for this position would be determined as part of the position management evaluation scheduled for the Public Works Department in August and September 1979. As noted in our comments for Corrective Action No. 2, the on-site visit found no action has been initiated to conduct the scheduled reviews. Unless the position management review of the Public Works Department is presently being conducted, the job description for this position must be amended to reflect the severe reduction in the scope and size of the workforce and classified to the Foreman Grade Level, WS-02. A copy of the amended and classified job description must be forwarded to this office within 45 days. Unless the amended and classified job description is received within 45 days, we will be required to certify the classification of the position based on the facts contained in the personnel management evaluation report.
Admin. Record at 31. The document does not mention either Goodrich or his position; neither does the document indicate that a reclassification of any position would in fact occur. The document makes a request for the “amended and classified job description” and refers to undisclosed facts “contained in the personnel management evaluation report.” In a cover letter accompanying these documents, the agency asserted that there were no other relevant documents related to Mr. Goodrich’s downgrade. Admin. Record at 24. There did exist other agency documents responsive to the Presiding Official’s request for evidence supporting the action taken, which, perhaps through inadvertence, were not disclosed. In his February 17,1981 letter to the MSPB requesting that the MSPB reopen his case, Goodrich referred to documents which were given to him in late January 1981. One of those documents, a brief, undated and unsigned report, is captioned with Mr. Goodrich’s name, title and position number. This report states:
This position is located in the General Trades Branch, Maintenance and Utilities Division. .. . [T]he number of employees supervised by the incumbent has decreased substantially, and most of the grounds work formerly under the incumbent’s supervision is being performed by outside contractor personnel. The severe reduction in the scope of work and size of work force supervised requires downgrading this position....
Upon review of the supervisory structure and size of the Maintenance and Utilities Division work force, the need for this position is seriously questioned.... Pri- or to any reclassification action on this position, a review of the Maintenance Division functions and supervisory structure should be made to determine whether the work and the employees supervised by the incumbent can be absorbed by another supervisor, and the Grounds Foreman position abolished.
Submit a report of the results of the review and the corrective action taken on this position to this office for review.
App. 7. In an apparently later document, the agency mentions that corrective action was taken related to “Case No. 17” to reclassify the position to Grounds Foreman, Grade 2 to reflect the “severe reduction in the scope and size of the workforce.” App. 8. At the administrative hearing, however, the agency’s representative, Mr. Neral, implied that the downgrading action was taken to correct Goodrich’s classification, rather than because of a reduction-in-force:
Mr. Neral: Well, my case is, I believe relatively short; consistent with the provisions of the law, we were subjected to an inspection by a higher level of Navy authority. As a result of that inspection [the] . . . Office of the Assistant Secretary of the Navy, Branch Office in Philadelphia, identified as the Personnel Management Evaluation Office. They identified during this inspection a number of corrective actions that had to be taken, some of which were related to classification actions. This took place in calendar year ’79.
One of the corrective actions taken was related to the position held by Mr. Goodrich.
Transcript of Hearing at 22-23. This statement during the hearing was the agency’s only indication on the record as to the reasons for Goodrich’s downgrade.
From the evidence which was omitted from the administrative record, it appears that Goodrich was downgraded due to an erosion away from his position of supervisory and other responsibilities, rather than due to an erroneous classification of his position. Goodrich characterizes a downgrading of this type as due to a reduction-in-force.
B.
The Act, although differentiating between classifications and reductions-in-force, does not precisely define the latter term. The regulations promulgated by the Office of Personnel Management pursuant to 5 U.S.C. § 3502 of the Act, describe when an agency must follow reduction-in-force procedures:
Each agency shall follow this part when it releases a competing employee from his/her competitive level by separation^] demotion, furlough for more than 30 days, or reassignment requiring displacement, when the relief is required because of lack of work, shortage of funds, reorganization, reclassification due to change in duties, or the exercise of reemployment rights or restoration rights.
5 C.F.R. § 351.201(a) (1982) (emphasis supplied). The regulations further define a reorganization for reduction-in-force purposes, as “the planned elimination, addition, or redistribution of functions or duties in an organization.” 5 C.F.R. § 351.203(f) (1982). The Federal Personnel Manual describes when reduction-in-force procedures apply to various types of downward classification:
c. Reclassification, Erosion and Reduction-In-Force.
General. When the grade of a position is reduced through the classification process the agency determines the reason for the change.
(a) Change in duties. If the record shows that the grade of a position must be reduced because of a deliberate change in duties and this causes an employee to be released from his or her competitive level through separation, demotion, furlough for more than 30 days, or reassignment requiring displacement, reduction-in-force procedures are applied to the employee who must be released.
(b) Reclassification. If the record shows that the grade of a position must be reduced because of the application of new classification standards or the correction of classification error, reduction-in-force procedures are not applied.
(c) When the downward reclassification of a position is due to duties gradually drifting away from a position by a slow erosion process, reduction-in-force procedures are applied.
Fed. Personnel Manual, Ch. 351, 13-5c (July 7, 1981). Thus, if Goodrich is correct that he was reclassified as a result of a gradual erosion of his responsibilities or deliberate reorganization of his duties, reduction-in-force procedures should have been used to effect his demotion.
These reduction-in-force procedures provide that the employee be notified at least thirty full days in advance of the effective date of his release from his competitive position. 5 C.F.R. § 351.801 (1982). The notice must specifically describe:
The action to be taken and its effective date; the employee’s competitive area, competitive level, subgroup, and service date; the place where the employee may inspect the regulations and records pertinent to this case; the reasons for retaining a lower-standing employee in the same competitive level . . .; the reasons for retaining a lower-standing employee in the same competitive level for more than 30 days ...; and the employee’s right to appeal to the Merit Systems Protection Board under the provisions of the Board’s regulations.
5 C.F.R. § 351.802 (1982) (emphasis added). Employees who face a reduction-in-force action also have certain rights to compete for retention of their competitive level, 5 C.F.R § 351.402 (1982), and to be placed on a retention register for their former competitive level, id. at § 351.404. Goodrich was afforded none of these rights; in fact, his Standard Form 50 states that his “retained grade will not be used for reduction-in-force purposes.” Admin.Record at 33. The regulations further provide that an employee “who has been affected by a reduction-in-force action and who believes this part has not been correctly applied” may appeal to the MSPB. 5 C.F.R. § 351.901 (1982). An employee affected by a reduction-in-force thus enjoys numerous procedural protections not available to employees demoted for other reasons.
If Goodrich was demoted as a result of a reduction-in-force, the agency was bound to follow its own procedures in implementing the action. That the agency did not do so is evident from the administrative record in this case. Goodrich was notified of his reduction in grade only three days before its effective date. The memorandum and Standard Form 50 which notified Goodrich of his reduction in grade contained none of the information prescribed by the regulations which govern reduction-in-force actions. He was not given the right to compete for retention of his competitive level, nor was his name placed on a retention register.
The agency concedes that reduction-in-force procedures are entirely different from reductions in grade due to classification changes, e.g., Supplemental Brief at 7. The agency urges instead that because Goodrich failed to raise his reduction-in-force argument before the MSPB, he failed to exhaust his administrative remedies.
The familiar doctrine of exhaustion requires that a party timely raise his
claim in an available administrative forum before seeking judicial relief from any supposed or threatened injury. E.g., Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463, 82 L.Ed. 638 (1938); First Jersey Securities, Inc. v. Bergen, 605 F.2d 690, 695 (3d Cir. 1979), cert. denied, 444 U.S. 1074, 100 S.Ct. 1020, 62 L.Ed.2d 756 (1980). The primary purpose of the exhaustion doctrine is to permit administrative officials and agencies the opportunity to consider issues and claims and to exercise their discretion before the matter is submitted to the courts. E.g., Harr v. Federal Home Loan Bank Board, 557 F.2d 747 (10th Cir. 1977), cert. denied, 434 U.S. 1033, 98 S.Ct. 766, 54 L.Ed.2d 780 (1978). The judicially created doctrine of exhaustion of administrative remedies is not absolute however; it is within the discretion of the court to waive the exhaustion requirement when application of the doctrine would be unjust. E. g., Cerro Metal Products v. Marshall, 620 F. 2d 964, 970 (3d Cir. 1980); Susquehanna Valley Alliance v. Three Mile Island, 619 F.2d 231, 245 (3d Cir. 1980); First Jersey Securities, Inc. v. Bergen, 605 F.2d at 695; Bendure v. United States, 554 F.2d 427, 431 (Ct.C1.1977); Athas v. United States, 597 F.2d 722, 725 (Ct.C1.1974). In this case, there are circumstances which mandate that the exhaustion requirement be waived. Goodrich was denied the information necessary to effectively prosecute his appeal to the MSPB. He repeatedly testified at the hearing, that he was not informed of the nature of the action against him, nor the reasons behind it. The Presiding Official requested documents which, because of inadvertence or other reason, were not disclosed. The MSPB regulations governing its appellate procedure do not provide for discovery by a party; Goodrich had no subpoena power or other compulsory process to aid him in his search for the underlying basis of his downgrade. Under these circumstances, Goodrich can hardly be expected to have exhausted his claim for failure to follow reduction-in-force procedures, since he had no indication that he was, in fact, demoted for that reason. Especially in a case where the agency, possibly through inadvertence, substantially contributed to the petitioner’s failure to exhaust and violated its . own regulations requiring that Goodrich be given adequate notice if he was demoted pursuant to a reduction-in-force, we believe that, in our discretion, the doctrine of exhaustion of administrative remedies should not operate as a bar to review of his appeal. See Ezratty v. Commonwealth of Puerto Rico, 648 F.2d 770, 775 (1st Cir. 1981); Harr v. Federal Home Loan Bank Board, 557 F.2d 747 (10th Cir. 1977); Athas v. United States, 597 F.2d 722, 725 (Ct.C1.1979).
The effect of a rigid application of the exhaustion requirement in this case would be to allow a federal agency, through inadvertence or intentional concealment, to neglect to notify an employee that his demotion was the result of a reduction-in-force. Since the MSPB does not have jurisdiction over other types of downward classifications with retained grade and pay, an employee would thereby be precluded from challenging an agency’s failure to follow reduction-in-force procedures, and would be denied his right to an appeal. We reject the government’s contention that it can rely on the judge-made doctrine of exhaustion, where its failure to follow its own regulations deprived petitioner of the information necessary to pursue his administrative remedies.
Goodrich’s contention that he was demoted due to a reduction-in-force requires proof and fact finding and it is proper that' the issue be decided by the Merit Systems Protection Board. E.g., Fucik v. United States, 655 F.2d 1089, 1095 (Ct.Cl.1981); Gratehouse v. United States, 512 F.2d 1104 (Ct.C1.1975). Accordingly, we remand to the MSPB for a hearing and decision. If Goodrich pursues his administrative remedies, he has the burden of proving that he was affected by a reduction-in-force and that the MSPB therefore has jurisdiction over his appeal.
IV.
Thus we will vacate the decision of the MSPB that it had no jurisdiction over Goodrich’s appeal and remand for further proceedings consistent with this opinion.
. The Court of Appeals has jurisdiction pursuant to 5 U.S.C. § 7703 (1976), which provides:
Judicial Review of Decision of the Merit Systems Protection Board
(a) (1) Any employee .. . adversely affected or aggrieved by a final order or decision of the Merit Systems Protection Board may obtain judicial review of the order or decision. ...
(b) (1) ... a petition to review a final order or final decision of the Board shall be filed in the Court of Claims or a United States court of appeals....
28 U.S.C. § 2342 (Supp.1982) provides:
The Court of Appeals has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of— * * * * * *
(6) all final orders of the Merit Systems Protection Board except as provided for in section 7703(b) of Title 5.
. Under 5 C.F.R. § 1201.56(a)(2), Goodrich, as the appellant, bore the burden of proof as to jurisdiction.
. 5 U.S.C. § 7513(d) provides:
(d) An employee against whom an action is taken under this section is entitled to appeal to the Merit Systems Protection Board. . . .
By virtue of 5 U.S.C. § 7512, employees who are reduced in grade have the right to appeal created by § 7513(d):
§ 7512 This subchapter applies to—
(1) a removal;
(2) a suspension for more than 14 days;
(3) a reduction in grade;
(4) a reduction in pay; and
(5) a furlough of 30 days or less[.]
. Since the MSPB decided that the matter was not within its appellate jurisdiction, it found it unnecessary to determine whether or not a prohibited personnel practice has occurred. Admin.Record at 43.5.
. 5 C.F.R. § 1201.114 (1982) provides that any party to an MSPB proceeding may file a Petition for Review with the Secretary. The MSPB may grant a petition for review when it is established that (a) new and material evidence is available that, despite due diligence, was not available when the record was closed; or (b) the decision of the presiding official is based on an erroneous interpretation of statute or regulations. 5 C.F.R. § 1201.115. The MSPB found that Goodrich’s petition for review did not meet the criteria of § 1201.115 and it therefore denied the petition. App. 51.
. On July 10, 1981 Goodrich moved to amend his petition for review filed in this court to include the MSPB’s failure to reconsider his case. Over the respondent’s opposition, on September 17, 1981 we granted Goodrich’s motion. On March 17, 1982 Goodrich notified this court that he had retained counsel. We granted leave for Goodrich’s attorney to file a supplemental brief and specifically requested that the brief comment on the effect of Atwell v. MSPB, 670 F.2d 272 (D.C.Cir.1981), which was decided after the initial briefing was completed.
. Positions in the federal workforce are first classified into groups according to similarities in the kind of work, level of difficulty and responsibility and qualification requirements. 5 U.S.C. § 5102(a)(4). All classes of positions are then divided into grades, which include positions in different subject areas of work, but similar with respect to level of difficulty, responsibility and qualification requirements. 5 U.S.C. § 5102(a)(5).
. Section 5362 provides:
(a) Any employee—
(1) who is placed as a result of reduction-in-force procedures from a position subject to this subchapter to another position which is subject to this subchapter and which is in a lower grade than the previous position, and
(2) who has served for 52 consecutive weeks or more in one or more positions subject to this subchapter at a grade or grades higher than that of the new position,
is entitled to the extent provided in subsection (c) of this section, to have the grade of the position held immediately before such placement be considered to be the retained grade of the employee in any position he holds for the 2-year period beginning on the date of such placement.
(b) (1) Any employee who is in a position subject to this subchapter and whose position has been reduced in grade is entitled, to the extent provided in subsection (c) of this section, to have the grade of such position before reduction be treated as the retained grade of such employee for the 2-year period beginning on the date of the reduction in grade.
. Under 5 U.S.C. § 5363(b), however, the employee’s retained pay cannot exceed 150% of the maximum rate of basic pay for the grade of the employee’s position after reclassification.
. Regardless of grade and pay retention, an employee can appeal the classification decision to the Office of Personnel Management. 5 U.S.C. § 5366(a) provides:
(a)(1) in the case of the termination of any benefits available to an employee under this subchapter on the grounds such employee declined a reasonable offer of a position the grade or pay of which was equal to or greater than his retained grade or pay, such termination may be appealed to the Office of Personnel Management under procedures prescribed by the Office.
(2) Nothing in this subchapter shall be construed to affect the right of any employee to appeal — (A) under section 5112(b) or 5346(c) of this title, or otherwise, any reclassification of a position; or
(B) under procedures prescribed the Office of Personnel Management, and any reduction-in-force action.
See Atwell v. MSPB, 670 F.2D at 280 n.13. See also 5 C.F.R. § 511.607 et seq. (1982).
. Section 5366(b) provides:
(b) for purposes of any appeal procedure (other than those described in subsection (a) of this section) ...
(1) any action which is the basis of an individual’s entitlement to benefits under this subchapter, and
(2) any termination of any such benefits under this subchapter,
shall not be treated as appealable.... (Emphasis added). Since reduction-in-force actions are specifically described in subsection (a) of § 5366, they are excluded from application of subsection (b).
. Section 5362 provides:
(a) Any employee—
(1) who is placed as a result of reduction-in-force procedures from a position ... to another position .. . and which is in a lower grade than the previous position, and
(2) who has served for 52 consecutive weeks or more in one or more positions subject to this subchapter at a grade or grades higher than that of the new position, is entitled ... to have the grade of the position held immediately before such placement be considered to be the retained grade of the employee in any position he holds for the two year period beginning on the date of such placement.
(b)(1) Any employee ... whose position has been reduced in grade is entitled ... to have the grade of such position before reduction be treated as the retained grade of such employee for the two year period beginning on the date of the reduction-in-grade....
5 U.S.C. § 5362 (emphasis added). By separating grade retention because of reductions-in-force from other types of entitlement to grade retention, Congress clearly distinguished between the grade retention rights of employees demoted for different reasons.
. There is no indication in the record as to how Goodrich came into possession of these documents.
. 5 U.S.C. § 5361(7) states that “reduction in force procedures” means “procedures applied in carrying out any reduction in force due to a reorganization, due to lack of funds or curtailment of work or due to any other factor.”
. The Federal Personnel Manual gives this definition of reduction-in-force:
An agency has a reduction-in-force when it releases an employee from his or her competitive level by separation, demotion, furlough for more than 30 days or reassignment requiring displacement, when lack of work or funds, reorganization, reclassification due to a change of duties, or the need to make a place for a person exercising reemployment or restoration rights requires the agency to release the employee.
Federal Personnel Manual, Ch. 35a, 1) l-2a (July 7, 1981).
Question: What party initiated the appeal?
A. Original plaintiff
B. Original defendant
C. Federal agency representing plaintiff
D. Federal agency representing defendant
E. Intervenor
F. Not applicable
G. Not ascertained
Answer:
|
songer_procedur
|
A
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the interpretation of federal rule of procedures, judicial doctrine, or case law, and if so, whether the resolution of the issue by the court favored the appellant.
Claude ROBINSON, Petitioner, v. MISSOURI MINING COMPANY and Wausau Insurance Company; Director, Office of Workers’ Compensation Programs, United States Department of Labor, Respondents.
No. 90-1347.
United States Court of Appeals, Eighth Circuit.
Submitted Sept. 13, 1991.
Decided Feb. 4, 1992.
Bradford A. Brett, Mexico, Mo., argued, for petitioner.
Mark E. Solomons, Washington, D.C., argued (Laura Metcoff Klaus, on brief), for respondents.
Before LAY, Chief Judge, MAGILL and BEAM, Circuit Judges.
The Honorable Donald P. Lay was Chief Judge of the United States Court of Appeals for the Eighth Circuit at the time this case was submitted and took senior status on January 7, 1992, before the opinion was filed.
BEAM, Circuit Judge.
On December 5, 1979, Claude Robinson filed a claim for black lung benefits with the Department of Labor under the Black Lung Benefits Act (Act), 30 U.S.C. §§ 901-945 (1988). After a hearing on October 5, 1984, an Administrative Law Judge denied Robinson’s claim. The Benefits Review Board affirmed the AU’s decision on February 28, 1990. Robinson appeals. We affirm.
I. BACKGROUND
A lengthy review of the evidence presented at Robinson’s hearing before the AU is not necessary for our purposes; a short discussion of the AU’s reasoning and the BRB’s affirmance will be sufficient. Applying the standards governing eligibility for black lung benefits contained in 20 C.F.R. § 727.203, the AU initially found that sufficient evidence existed to invoke an interim presumption of Robinson’s total disability due to pneumoconiosis (black lung). Robinson had worked as a miner for thirteen years and ventilatory studies, blood gas studies, and medical opinion raised the interim presumption under section 727.203(a)(2), (3), (4). The AU found that conflicting x-ray evidence failed to raise the interim presumption under section 727.203(a)(1).
Although sufficient evidence existed to raise the interim presumption, the AU ultimately concluded that the evidence as a whole rebutted the presumption under section 727.203(b)(2), (3), (4). The AU found that Robinson was able to do his usual coal mine work or comparable and gainful work, that Robinson’s disability did not arise out of coal mine employment, and that the medical evidence indicated that Robinson did not have pneumoconiosis.
In reaching his final decision, the AU credited the opinion of one examining physician, Dr. Lloyd Hollinger, over that of another, Dr. Max Gutensohn. In Dr. Hol-linger’s view, Robinson was not suffering from pneumoconiosis, but rather from “chronic obstructive pulmonary disease of a very mild degree [that] can be solely related to his smoking history.” Hollinger Report, Sept. 26, 1980, at 2. Dr. Guten-sohn, in contrast, believed that “[i]t would appear, in as much as [Robinson] has not been exposed to any other irritant except for smoking for some periods of time, that he is disabled due to previous coal mine employment.” Gutensohn Report, Sept. 10, 1984, at 2. The AU relied on Dr. Hollinger’s opinion because it was more detailed, less tentative, and included a specific finding that Robinson could return to his work as a caterpillar operator whereas Dr. Gutensohn’s opinion failed to address this issue.
Robinson appealed the AU’s decision pro se and the BRB construed his arguments as an assertion that the AU’s order was not supported by substantial evidence on the record as a whole. The BRB affirmed the AU’s order, concluding that substantial evidence supported the AU’s finding concerning rebuttal of the interim presumption under section 727.203(b)(2). In particular, the BRB held that the AU’s decision to credit Dr. Hollinger’s opinion over Dr. Gutensohn’s on the issue of whether Robinson was able to work as a caterpillar operator was rational. Because rebuttal of the interim presumption under section 727.203(b)(2) was sufficient to uphold the AU’s decision, the BRB declined to review the ALJ’s other findings.
II. DISCUSSION
Our review of the BRB’s order is very limited. The BRB cannot set aside the AU’s factual findings unless the findings are not supported by substantial evidence in the record as a whole. See 30 U.S.C. § 932(a) (1988); 33 U.S.C. § 921(b)(3) (1988). If the AU’s findings satisfy this requirement, the BRB must affirm even though it might have reached a different conclusion than the AU were it the fact-finder. E.g., Brown v. Director, Office of Workers’ Compensation Programs, 914 F.2d 156, 158 (8th Cir.1990). In particular, the decision to credit one of two conflicting medical opinions as better documented and reasoned belongs to the AU as fact-finder. See Phillips v. Director, Office of Workers’ Compensation Programs, 768 F.2d 982, 984 (8th Cir.1985). Our role on appeal is merely to assure that the BRB adhered to the proper standard of review. To fulfill this role, we examine the AU’s findings under the same standard. E.g., Brown, 914 F.2d at 158.
After review of the record before the AU, we agree with the BRB that the AU’s decision to credit Dr. Hollinger’s opinion over Dr. Gutensohn’s is supported by substantial evidence in the record as a whole and is not contrary to law. Robinson asserts that the AU’s reliance on Dr. Hollinger is improper as a matter of law because Dr. Hollinger’s diagnosis was the result of subjective opinions concerning pneumoconiosis hostile to the spirit of the Act. In particular, Robinson contends that Dr. Hollinger testified that he would never diagnose pneumoconiosis absent a positive x-ray. The BRB has held that an AU may discount the opinion of a physician who holds such a view because the view directly contravenes a specific provision of the Act. Nagle v. Barnes & Tucker Co., 1 Black Lung Rep. (MB) 1-961, 1-965 (Ben.Rev.Bd.1978); accord Black Diamond Coal Mining Co. v. Benefits Review Bd., 758 F.2d 1532, 1534 (11th Cir.1985). The present-case, however, is distinguishable. Dr. Hol-linger’s exact testimony was that someone would have to have an abnormal x-ray if they were “totally impaired” due to pneu-moconiosis, and merely agreed that he “would not be inclined” to diagnose pneu-moconiosis absent an abnormal x-ray. Hol-linger Deposition Transcript at 50-51. Furthermore, read in its full context, Dr. Hol-linger’s testimony was that considering Robinson’s smoking history, the absence of a positive x-ray led him to conclude that Robinson’s respiratory problems were the result of smoking and not pneumoconiosis. Id. at 33. On cross-examination, Dr. Hol-linger expressly stated that his conclusion was based on all the medical information available to him (which included the results of ventilatory studies, arterial blood gas tests, an electrocardiogram, as well as two x-rays). Id. at 38. While Dr. Hollinger’s opinion regarding Robinson was certainly based in part on the lack of a positive x-ray, it was not based solely on this. His opinion, therefore, was not based on a medical theory hostile to the Act.
Robinson further argues that the AU should have credited Dr. Gutensohn’s opinion because it was based on more recent information. Dr. Hollinger’s opinion was based on a personal examination and the results of tests performed in 1980, including negative x-rays. Dr. Gutensohn’s opinion was based on a personal examination and the results of tests performed in 1984, including a positive x-ray (which was the only x-ray taken since 1980). As pneu-moconiosis is a progressive disease, the AU certainly should consider the temporal proximity of conflicting test results in determining which of two different medical opinions to credit. See Mullins Coal Co. v. Director, Office of Workers’ Compensation Programs, 484 U.S. 135, 151-52, 108 S.Ct. 427, 436, 98 L.Ed.2d 450 (1987). Temporal proximity, however, is simply a factor to be considered, not a controlling one. Viewing the record as a whole, we conclude that substantial evidence exists to support the AU’s decision to credit Dr. Hollinger’s opinion that Robinson’s respiratory problems were the result of his smoking history and not his exposure to coal dust, despite the comparative age of the information upon which the opinion was based.
Robinson also challenges the AU’s decision to credit the portion of Dr. Hollinger’s opinion concerning Robinson’s ability to return to work as a caterpillar operator. Robinson emphasizes that Dr. Hollinger did not ask Robinson about the specifics of his job, which included cleaning mud from the caterpillar’s tracks at the end of the shift. Robinson introduced evidence that this was the most strenuous part of the job. See Ray Williams Deposition Transcript at 10. Dr. Hollinger, however, did testify that he was familiar with the general operation of heavy machinery, including caterpillars, and Dr. Gutensohn expressed no opinion whatsoever on the issue. Furthermore, statements which Robinson made during an interview with a representative of his former employer implied that he retired mainly because of his age, 65, and not his respiratory problems. Employer’s Exhibit 3, at 4, 8. Given the high degree of deference that we must accord the AU’s findings of fact, we are unable to hold that the AU’s decision to credit this portion of Dr. Hol-linger’s testimony is not supported by substantial evidence.
III. CONCLUSION
We conclude that the AU’s decision to credit Dr. Hollinger’s opinion over Dr. Gu-tensohn’s is supported by substantial evidence in the record as a whole. Because Dr. Hollinger’s opinion that Robinson is able to return to work as a caterpillar operator is sufficient to rebut the interim presumption of pneumoconiosis and to uphold the AU’s denial of Robinson’s claim for black lung benefits, we affirm the BRB’s order.
. The dissent asserts that Dr. Hollinger must have based his conclusion solely on the lack of a positive x-ray, because the other test results available to him raised a presumption of pneu-moconiosis. We do not agree with the dissent’s analysis. The results of the ventilatory studies and arterial blood gas tests merely raised a presumption of pneumoconiosis as a matter of law because of Robinson’s coal mining experience, see 20 C.F.R. § 727.203(a)(2), (3), they did not require a diagnosis of pneumoconiosis as a matter of medical science. Moreover, the blood gas tests revealed a significant amount of car-boxyhemoglobin, which was related to Robinson’s smoking. Hollinger Report, Sept. 26, 1980, at 3. Dr. Hollinger’s conclusion, therefore, was not inherently inconsistent with the other test results.
. The dissent also asserts that the AU's reliance on Dr. Hollinger’s opinion is misplaced because Dr. Hollinger’s report is inaccurate regarding Robinson’s coal mining experience. Under the circumstances, however, we find this argument unconvincing. Both Dr. Gutensohn’s and Dr. Hollinger’s reports contain some inaccurate background information. Dr. Gutensohn, for example, significantly understated the extent of Robinson’s smoking history. Robinson testified that he smoked one can of pipe tobacco every week or week and one half for twelve years, up to one pack of cigarettes per day for eleven years, and up to three to four cigarettes per day for four more years. Hearing Transcript at 29-30. According to Dr. Gutensohn’s report, Robinson smoked about one pack per day for twelve years and for part of that time, had just one cigarette after meals. Gutensohn Report, Sept. 10, 1984, at 1. Thus, in this case, the ALJ had to credit one medical opinion based in part on inaccurate information over another opinion with the same flaw. Viewing the record as a whole, we believe that substantial evidence exists to support the AU’s decision here.
Question: Did the interpretation of federal rule of procedures, judicial doctrine, or case law by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_typeiss
|
C
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the general category of issues discussed in the opinion of the court. Choose among the following categories. Criminal and prisioner petitions- includes appeals of conviction, petitions for post conviction relief, habeas corpus petitions, and other prisoner petitions which challenge the validity of the conviction or the sentence or the validity of continued confinement. Civil - Government - these will include appeals from administrative agencies (e.g., OSHA,FDA), the decisions of administrative law judges, or the decisions of independent regulatory agencies (e.g., NLRB, FCC,SEC). The focus in administrative law is usually on procedural principles that apply to administrative agencies as they affect private interests, primarily through rulemaking and adjudication. Tort actions against the government, including petitions by prisoners which challenge the conditions of their confinement or which seek damages for torts committed by prion officials or by police fit in this category. In addition, this category will include suits over taxes and claims for benefits from government. Diversity of Citizenship - civil cases involving disputes between citizens of different states (remember that businesses have state citizenship). These cases will always involve the application of state or local law. If the case is centrally concerned with the application or interpretation of federal law then it is not a diversity case. Civil Disputes - Private - includes all civil cases that do not fit in any of the above categories. The opposing litigants will be individuals, businesses or groups.
MERCHANTS NATIONAL BANK, VICKSBURG, MISSISSIPPI, Plaintiff, v. SOUTHEASTERN FIRE INSURANCE CO., INC. and American Security, Insurance Co., Inc., Defendants-Appellees, v. John N. BARLOW and Edna Earl Barlow, Appellants. John N. BARLOW, Plaintiff-Appellant, v. AMERICAN SECURITY INSURANCE CO., and Southeastern Fire Insurance Co., Inc., Defendants-Third Party Defendants-Appellees, v. Edna Earl BARLOW, Defendant-Third Party Plaintiff-Appellant. VICKSBURG SMALL BUSINESS INVESTMENT CO., Plaintiff, v. AMERICAN SECURITY INSURANCE CO., INC., Defendant-Appellee, v. John N. BARLOW and Edna Earl Barlow, Appellants.
No. 87-4518.
United States Court of Appeals, Fifth Circuit.
Sept. 6, 1988.
Rehearing Denied Oct. 3, 1988.
Landman Teller, Jr., Kenneth B. Rector, Teller, Chaney & Rector, Vicksburg, Miss., for appellants.
Walker W. Jones, III, Ross F. Bass, Jr., Phelps, Dunbar, Marks, Claverie & Sims, Jackson, Miss., for defendant-appellee.
Before THORNBERRY, WILLIAMS and SMITH, Circuit Judges.
JERRE S. WILLIAMS, Circuit Judge:
In this diversity suit, John N. Barlow appeals from a judgment barring his recovery under a homeowner’s insurance policy issued by appellee American Security Insurance Co. (“American”). His mother, Edna Barlow, joins in the appeal as a mortgagee claiming a right to recover under the policy. John Barlow also appeals the dismissal of his claim against appellee Southeastern Fire Insurance Company, Inc., (“Southeastern”), for wrongful foreclosure and sale of his property. After consideration of all issues presented, we affirm the district court.
On December 14, 1981, John Barlow purchased a $245,000.00 casualty insurance policy from American Security Insurance Company (“American”), covering his house and its contents. At the time of the issuance of the policy, Barlow had been in-dieted for forgery and was over $230,-000.00 in debt, with five mortgages on his property. The Barlow home burned completely on March 26, 1982. Barlow filed a proof of loss, but American refused to pay on the policy. American also refused to pay those holding mortgages on Barlow’s property.
After several months passed, Barlow sued American, and was eventually joined in the suit by four mortgagees. Two of the mortgagees, Merchants National Bank, Vicksburg (“MNB”) and Vicksburg Small Business Investment Company (“VSBIC”) had filed individual suits against American and Southeastern. Southeastern had taken over Barlow’s policy from American. These actions were combined with Barlow’s suit and removed to federal district court in Mississippi.. Barlow’s mother Edna Barlow and another mortgagee, Bossier Bank & Trust Co. (“Bossier”) cross-claimed against American for failing to pay on John Barlow’s policy. All four mortgagees counterclaimed against Barlow for the amounts due on their mortgages.
Following a jury trial, the district court directed verdicts against Barlow and mortgagees Bossier and Edna Barlow. The jury returned a verdict for MNB and VSBIC against American based on the mortgage clause contained in the homeowner’s policy. All mortgagees obtained judgments against John Barlow on their notes.
Barlow and mortgagees Bossier and Edna Barlow, appealed the directed verdict. MNB appealed the denial of an instruction on punitive damages. This Court reversed the directed verdicts against John Barlow, Edna Barlow, and Bossier, and held that MNB was entitled to an instruction on punitive damages. Merchants National Bank v. Southeastern Fire Insurance Co., 751 F.2d 771 (5th Cir.1985) (“Merchants I”). The case was remanded for a new trial.
The insurance companies then settled with Bossier and MNB, so all mortgagees except Edna Barlow were paid. Thus, the second trial involved only the claims of John and Edna Barlow. John Barlow added a claim of wrongful foreclosure against defendant insurance company Southeastern. (MNB had transferred its note to Southeastern as part of the settlement agreement, and Southeastern foreclosed on Barlow’s property.) The district court directed a verdict for Southeastern on the issue of wrongful foreclosure, and directed a verdict against Edna Barlow on the issue of punitive damages. The issue of liability of the insurance companies to Barlow was submitted to a jury. The jury found no liability. Edna Barlow appeals the directed verdict on punitive damages, and reserves her right to recover if John Barlow recovers. John Barlow appeals the jury verdict against his recovery on the policy, as well as the directed verdict on wrongful foreclosure.
I. Concealment
The jury found by special interrogatory that Barlow could not recover under his policy with American. No specific factual determinations accompany the verdict or judgment. The record discloses, however, that American relied exclusively on the affirmative defense of concealment in the procurement of the policy. Barlow attacks this defense by claiming: (1) the issue of concealment was waived by American’s failure to raise it in the first trial, (2) the law of the case in Merchants I bars presentation of evidence of concealment, and (3) there is insufficient evidence of concealment to support the verdict. Barlow also claims that the district court improperly instructed the jury on the requirements of proving concealment. We address these issues in turn.
A. Waiver
Barlow claims American should not have been allowed to rely on the defense of concealment in the procurement of the policy because the precise issue was not raised in the first trial. Although concealment was certainly an issue in the first trial and appeal, the focus at that time was upon concealment occurring after the issuance of the policy. See Merchants I, supra, 751 F.2d at 775-79. The second trial centered around the issue of concealment prior to issuance of the policy. The issue, stated in the pretrial order for the second trial, was phrased as follows: “whether Barlow misrepresented the amount and number of mortgages on his property when he applied for issuance of the homeowner’s policy.” Barlow never objected in the district court that this issue had been waived by American’s failure to raise it at the first trial. He claims waiver only now on appeal.
We follow the reasoning in Trinity Carton Co. v. Falstaff Brewing Corp., 767 F.2d 184, 192 n. 13 (5th Cir.1985), which states: “The pretrial order controls the course of the trial ... objections thereto are required or else a litigant is barred from raising the matter on appeal.” Because the issue of concealment in the procurement of the policy was contained in the pretrial order and was not objected to at trial on grounds of waiver, and because of the substantial overlap between the issues of concealment in procurement versus concealment after issuance, we find that American did not waive its defense.
B. The Law of the Case
Barlow contends that this Court’s opinion in Merchants I bars all evidence of concealment. He relies on the following language in Merchants I: “American had actual knowledge of Barlow’s financial problems and criminal activities at the time of or shortly after the issuance of the policy, yet it denied payment because of the non-disclosure of that information.” Supra, 751 F.2d at 777.
The quotation is taken out of context. It is dicta from the portion of the first appeal which dealt with allegations of concealment by the mortgagees. We held that no material change in Barlow’s condition required the mortgagees to notify American, and that an instruction for punitive damages should have been given. Merchants I, supra, at 777. By contrast, the second trial centered mainly upon whether Barlow concealed information in order to obtain the insurance policy in the first place. The issue was not whether American knew, “at the time of or shortly after the issuance of the policy,” that Barlow was having “financial problems,” but more accurately, whether Barlow misrepresented the amount of his indebtedness. We thus find that evidence of concealment was not precluded by Merchants I.
C. Sufficiency of the evidence
American asserts the established law that because Barlow did not move for a directed verdict, he is foreclosed from attacking the sufficiency of evidence on appeal. Dunn v. Sears, Roebuck & Co., 639 F.2d 1171, 1175 (5th Cir.1981). We recognize the application of that rule. To avoid any feeling that the case was lost on a technicality, however, we briefly consider the merits and conclude that the evidence is sufficient to support the verdict.
Under Mississippi law, an insurance company seeking to cancel coverage based on the concealment clause of the policy must show that the insured knowingly and willfully made false, material statements. Watkins v. Continental Insurance Co., 690 F.2d 449, 451 (5th Cir.1982). American presented evidence that Barlow did not reveal the indictment against him for forgery, the total number of mortgages on his house, or the total amount of indebtedness on his mortgages. An underwriter for American testified that if she had known any of this information, she would not have approved issuance of the policy.
Although the testimony is undisputed that American’s local agent never inquired into Barlow’s criminal matters, nor asked the exact number of mortgages on the house, we find evidence in the record from which the jury could infer that Barlow misrepresented the amount of indebtedness on the property. American introduced a memorandum written to underwriter Judy Bowen, from agent Wayne Latner. Latner was a partner in the Vicksburg Insurance Center at the time Barlow applied for coverage. The note reads:
Judy:
This house was built in stages—which is the reason for the 4 lienholders. There is now only $100,000.00 total indebtedness on this house.
[signature]
The actual indebtedness on the house was over $200,000, not $100,000. Latner testified that he obtained the erroneous information from agent Charles Johnson, who had obtained all the underwriting information from Barlow.
A jury may draw reasonable inferences from the evidence, and inferences can sufficiently support a verdict. Pregeant v. Pan American World Airways, Inc., 762 F.2d 1245 (5th Cir.1985). Whether or not we would draw the same inference against Barlow is unimportant: “An appellate court is not free to reweigh the evidence or to re-evaluate credibility of witnesses or to substitute for the district court’s reasonable factual inferences from the evidence other inferences that the reviewing court may regard as more reasonable.” Glass v. Petro-Tex Chemical Corp., 757 F.2d 1554 (5th Cir.1985); Boeing Company v. Shipman, 411 F.2d 365, 375 (5th Cir.1969) (en banc). We accept the jury’s conclusion that Barlow misrepresented his indebtedness on the property.
D. Jury Instruction
Barlow claims the district court erred in instructing the jury on the defense of concealment. He claims the charge shifted the burden of proof to the insured by-suggesting a duty to volunteer material information. Our review of the charge as a whole, however, reveals that it did not make such a requirement. The portion of which Barlow complains, reads as follows:
[T]he applicant is required to reveal fully and truthfully all information which a reasonable applicant under the same or similar circumstances would know would be material to the company’s decision to accept the risk. The applicant is not required to reveal information which is not directly asked of him, and which a reasonable applicant under the same or similar circumstances would not know was material to the company’s determination to accept the risk ... if an applicant for the insurance induces the insurer to accept his application and issue the policy through misrepresentation and concealment, the policy is void.
As we read it, this charge states that an insured must reveal unsolicited information only if he reasonably is expected to know it is information to which the insurance company is entitled. This requirement may or may not be wholly accurate under Mississippi law. More important, however, is the fact that the judge clearly instructed the jury on American’s burden of proof, and stated that Barlow must have concealed or misrepresented information, knowingly and willfully, in order for the policy to be void. There was no shifting of the burden of proof. The charge satisfies the guidelines set out by this Court. It need not be perfect, but in general must instruct correctly. Borel v. Fibreboard, 493 F.2d 1076 (5th Cir.1973). We find no reversible error.
II.Wrongful Foreclosure
American and Southeastern settled with mortgagee MNB following the first trial. Pursuant to the statutory mortgage clause contained in the insurance policy, MNB assigned to Southeastern all of its rights against Barlow. Miss.Code Ann. § 83-13-9 (1972). At the time of the transfer, MNB had already begun to foreclose on Barlow’s property. Southeastern then completed foreclosure and sale of the property to a third party. At the second trial, Barlow counterclaimed against Southeastern for wrongful foreclosure, claiming it had no right to foreclose or sell the property before liability was determined. In other words, Barlow claims Southeastern should not have sold his land at a time when it may have owed him money. The district judge directed a verdict against Barlow on his claim of wrongful foreclosure.
An insurer who pays a mortgagee for loss under a fire insurance policy while denying liability to the mortgagor or owner is subrogated to all the rights of the mortgagee and is entitled to an assignment and transfer of the mortgage. Tolar v. Barkers Trust Savings & Loan Ass’n., 363 So. 2d 732 (Miss.1978). No Mississippi case has been found, however, that has applied the rule in Tolar to a situation such as this where the insured’s property is foreclosed by the insurer prior to appeal and sold while a second trial is pending on liability.
Barlow claims that earlier Mississippi case law bars the right to subrogation by an insurer prior to judicial determination on liability. But the cases he cites, Home Insurance Co. v. Northington, 198 Miss. 650, 23 So.2d 537 (1945); Hartford Fire Insurance Company v. Green, 148 Miss. 627, 114 So. 865 (1927), involve insurance policies found to be valid. Further, a judicial determination on liability was rendered in the instant case, but was reversed following transfer of the mortgage.
Lacking precise guidance on this issue by the Mississippi Supreme Court, we give great weight to the decision of the district judge. Avery v. Maremont Corp., 628 F.2d 441, 446 (5th Cir.1980) (“where the state law is uncertain, we are hesitant to second guess the federal district court judge.”) Moreover, Barlow’s claim of wrongful foreclosure, premised on his own right to recover against Southeastern, is substantially undermined by our affirmance of the verdict for American and Southeastern on the issue of liability. Even if he could establish wrongful foreclosure at the time it occurred, no damage could be shown since the right to foreclose has been established. We thus find that the district court did not err in directing a verdict against Barlow on the issue of wrongful foreclosure.
III. Mistrial
Barlow claims the district court should have granted a mistrial because of misconduct by defense counsel. Barlow complains specifically of references made during trial to the falsification of student records at the commercial school he formerly owned. After reviewing the entire record, we do not see that these references, two by counsel and one by a witness, resulted in prejudice. The district judge sustained each objection to the mention of falsifying records, and instructed the jury to disregard the information. The matter was never developed. We find no misconduct which would warrant a mistrial. See Pierce v. Ramsey Winch Co., 753 F.2d 416, 433 (5th Cir.1985); Crown Colony Dist. v. United States Fire Insurance Co., 510 F.2d 544, 545 (5th Cir.1975).
IV. Damages
The Barlows raise several claims relating to punitive damages, and one with respect to calculating actual damages. Because neither Edna or John Barlow is entitled to actual damages under the policy, there clearly is no basis to award punitive damages.
V. Conclusion
We affirm the verdict in favor of American, against recovery by John Barlow and Edna Barlow. We find that the district court did not err in directing a verdict against John Barlow on the issue of wrongful foreclosure, nor did it err in refusing to grant a mistrial based on misconduct. We find no right to punitive damages. The decision of the district court is
AFFIRMED.
. Barlow later was convicted for forging his ex-mother-in-law’s signature in order to obtain one of the mortgages on his house.
. Four mortgagees were named as beneficiaries under the policy. Mortgagee Edna Barlow was not named in the policy.
. The claim of the fifth mortgagee, Margaret C. Weems, Barlow’s ex-mother-in-law, was handled in a separate state court action. Weems v. American Security Insurance Co., 450 So.2d 431 (Miss.1984), which determined that she was entitled to recover against American based on the statutory mortgage clause contained in the policy.
.Throughout this opinion, we will refer to the defendant insurance companies, together, simply as "American."
. Although Barlow neglected to move for directed verdict, he did submit a proposed general jury instruction requesting a directed verdict in his favor. The proposed instruction made no reference to insufficiency of the evidence. Barlow argues that his request satisfies the requirements of Fed.R.Civ.P. 50, for purposes of challenging the sufficiency of the evidence. This Court has never considered the precise issue, but there is no authority that a requested instruction which does not state specific grounds can preserve review of the sufficiency of the evidence. A requested instruction which does not specify grounds of insufficient evidence, deprives the opposition of an opportunity to cure its case, and defeats the purpose behind the "specific grounds” requirement of Rule 50. Cf. Thezan v. Maritime Overseas Corp., 708 F.2d 175 (5th Cir.1983) (grounds for motion for directed verdict less than precise but sufficient to make trial court aware of position and preserve issue for appeal): Quinn v. Southwest Wood Products, Inc., 597 F.2d 1018, 1024-26 (5th Cir.1979) ("There is much to be said for the view that whenever a party, at the conclusion of the evidence and before the jury has begun to deliberate, clearly points out a claimed evidentiary deficiency to the court and counsel, ... on the record in an unambiguous formal motion for relief, however denominated, this should suffice.”). See also Texoma AG-Products v. Hart ford. Accident & Indemnity Co., 755 F.2d 445, 448 (5th Cir.1985) (party preserved error by objecting to jury charge on grounds of sufficiency of the evidence).
. Barlow was investigated for altering student records in order to obtain federal funds.
. We reject Edna Barlow’s claim that, as a mortgagee, she was entitled to a separate instruction on punitive damages. The case she relies upon, Nationwide Mutual Fire Insurance Co. v. Dungan, 818 F.2d 1239 (5th Cir.1987), simply states that an unnamed mortgagee has an equitable lien on the proceeds of the policy. Nationwide does not stand for the novel proposition that an unnamed mortgagee may recover punitive damages independent of recovery by the insured.
Question: What is the general category of issues discussed in the opinion of the court?
A. criminal and prisoner petitions
B. civil - government
C. diversity of citizenship
D. civil - private
E. other, not applicable
F. not ascertained
Answer:
|
songer_usc1sect
|
462
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the number of the section from the title of the most frequently cited title of the U.S. Code in the headnotes to this case, that is, title 50. In case of ties, code the first to be cited. The section number has up to four digits and follows "USC" or "USCA".
Robert Nolen BRIGGS, Appellant, v. UNITED STATES of America, Appellee.
No. 21363.
United States Court of Appeals Ninth Circuit.
June 26, 1968.
J. B. Tietz (argued), Michael Hannon, Los Angeles, Cal., for appellant.
Michael Heuer (argued), Asst. U. S. Atty., Robert L. Brosio, Asst. U. S. Atty., Chief, Criminal Div., Anthony Michael Glassman, Asst. U. S. Atty., William M. Byrne, Jr., U. S. Atty., Los Angeles, Cal., for appellee.
Before KOELSCH and BROWNING, Circuit Judges, and POWELL, District Judge.
POWELL, District Judge.
This is an appeal from a conviction and sentence to three years imprisonment after the appellant was found guilty of refusing to submit to induction into the armed forces in violation of 50 U.S.C. App. § 462.
The appellant completed his classification questionnaire and filed it with his local board on February 3, 1964. He was first given a student deferment. On August 19, 1965 he was reclassified I-A. He was then ordered to report for a physical examination on September 17, 1965. Upon examination he was certified as acceptable for military service.
On October 18, 1965 the board received a letter from appellant asking permission to travel out of the country. This request was denied. On October 27, 1965 the board mailed appellant an order to report for induction on November 9. Appellant then sent a telegram to the board advising that he was in Mexico and married and requesting an extension of his induction date. He was advised by the board on November 5, 1965 that his telegram had been received but that the facts presented did not warrant reopening or reclassification.
On November 8,1965 appellant’s mother requested the special form for conscientious objectors, SSS Form 150. The board received appellant’s completed form on December 2, 1965. The form asked “when. and from whom” appellant acquired the beliefs upon which he founded his conscientious objection. Appellant replied:
“I have inculcated attitudes and beliefs from my parents, who are both pacifists and humanists and who have a religious reverence for the value of life. I also attended Quaker services (Friends meetings) in my teens which had a tremendous influence in my credo.”
The form also asked when appellant had given public expression to his beliefs. Appellant replied :
“I have given public expressions to peace marches; moreover, within the Young Peoples Socialist League, of which I have been a member for five years, I have always supported the pacifist position.”
These responses indicate that appellant’s conscientious objection pre-da ted the order to report for induction. Appellant made no statement to the local board which would evidence that appellant’s beliefs crystallized after he was ordered to report for induction. On December 10 appellant was advised that the facts presented did not warrant reopening or reclassification. On December 13, 1965 appellant was again ordered to report for induction.
On December 21, 1965 appellant reported. He indicated to induction station personnel that he would refuse induction. He was not given a physical inspection, but was segregated with other “refusals” away from the more cooperative inductees. When requested to take the symbolic step forward signifying induction into the armed forces, appellant refused. When according to regulation the process was repeated, appellant again refused.
Appellant argues three points on appeal: First, he contends that the board erred in declining to reopen his classification on receipt of his SSS Form 150; Second, he claims that induction station personnel erred by not giving him a physical inspection; and Third, he claims that the trial court erred by excluding testimony of his counselor. We agree with appellant’s second contention and reverse.
I
FAILURE TO REOPEN
Appellant claims that the board should have reopened to determine when his beliefs crystallized. He relies on United States v. Gearey, 368 F.2d 144 (2nd Cir. 1966). Precisely the same claim was made in Dugdale v. United States, 389 F.2d 482, 484 (9th Cir. 1968) in which the court held:
“ * * * It was incumbent upon Dugdale to submit statements and information which, if true, would be a basis for the change in classification. He was required to show a ‘change of status’ occurring after receipt of the induction notice.”
Because appellant failed to show or even claim a change of status after the order to report for induction, he cannot rely on United States v. Gearey. Furthermore, appellant’s SSS Form 150, like Dugdale’s, indicated that his conscientious objection was formulated prior to the order to report for induction.
II
PHYSICAL INSPECTION
Army Regulations 601-270, ch. 3, § III, para. 69 at 3-23 (1965) states:
“Registrants or applicants for induction or enlistment, who have undergone a medical examination of the prescribed scope within 180 days prior to the induction processing and have been found medically qualified, will undergo a physical inspection.”
See also, AR 601-270, ch. 1, § I, para. 10 (1965). The physical inspection required by paragraph 69 is relatively cursory, compared to the pre-induction physical examination which appellant was given on September 17, 1965. AR 601-270 ch. 2, § II, para. 32 at 2-9 chronologically lists the steps in induction processing, including:
“(4) Physical inspection or complete medical examination, as appropriate.
******
“(8) Induction (if found fully acceptable for induction into the Armed Forces).”
AR 601-270 ch. 2, § I, para. 24, at 2-8 (1965) enumerates classes of persons ineligible for induction, including “b. Registrants who fail to meet the prescribed medical standards.”
Induction station personnel told appellant “We don’t give physicals to refusals.” But the regulations clearly required that appellant be given a physical inspection and that he be rejected if found unfit.
Not all procedural irregularities vitiate an order to step forward for induction. Prejudice to the registrant from failure to observe regulations must be established. United States ex rel. Lipsitz v. Perez, 372 F.2d 468, 469 (4th Cir.), cert, den., 389 U.S. 838, 88 S.Ct. 57, 19 L.Edüd 100 (1967); Johnson v. United States, 285 F.2d 700 (9th Cir. 1960); Yaich v. United States, 283 F.2d 613, 619-620 (9th Cir. 1960); Mason v. United States, 218 F.2d 375 (9th Cir. 1954); Knox v. United States, 200 F.2d 398, 401 (9th Cir. 1952). The cases cited involve disregard of regulations by selective service system personnel. The disregard of regulations in this case was by military personnel. But no reason appears why the same rule should not apply, although the immediate effect in this case is to vitiate the order to step forward rather than the order to report for induction. Army Regulations, like selective service regulations, constitute part of the procedural framework governing induction. See Mason v. United States, supra.
Counsel have not cited, and we have not found, any cases which determine whether denial of a physical inspection is sufficiently prejudicial to vitiate the induction process.
An analogy drawn from exhaustion of administrative remedies cases indicates that the denial of a physical inspection should be held prejudicial. In Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305 (1944) the registrant appealed his conviction for failing to report for work of national importance. The Supreme Court held that he could not challenge his classification because he had not reported for work (and then refused to begin). The court indicated that if he had reported for work he might have been medically rejected. In Estep v. United States, 327 U.S. 114, 123, 66 S.Ct. 423, 90 L.Ed. 567 (1946) the court declared that Falbo had been merely an application of the doctrine of administrative remedies. Finally, in the case of a registrant named Dodez, reported as Gibson v. United States, 329 U.S. 338, 67 S.Ct. 301, 91 L.Ed. 331 (1946), the court made it clear that the only determinative factor in the Falbo case had been the availability of a physical inspection upon request at the camp. Dodez failed to report to a work camp, yet was held to have exhausted his administrative remedies. Between Falbo and Dodez selective service regulations were changed to preclude rejection of a registrant even though he failed the work camp inspection. The rule of these cases is clear: If a registrant does not avail himself of the opportunity to fail a physical examination which might change his classification, he cannot contest the validity of an order to report on the basis that he was wrongly classified. See also, United States ex rel. Flakowicz v. Alexander, 164 F.2d 139 (2nd Cir. 1947), cert, den., 333 U.S. 828, 68 S.Ct. 453, 92 L.Ed. 1114 (1948). This same factor, the possibility of rejection and reclassification, indicates that denial of a physical inspection to appellants was prejudicial. In the exhaustion of administrative remedies cases, this possibility is deemed sufficiently important to justify refusal to consider a registrant’s claims of error. It appears reasonable that this possibility be deemed equally important when the military disregards the requirements of a physical inspection.
We could assume that the likelihood of rejection in appellant’s case was slight. The physical inspection is relatively cursory, and appellant had recently passed a more rigorous examination. But the exhaustion of administrative remedies cases are concerned with the same odds. And the physical inspection is not a time consuming, resource wasting process. In short, the exigencies of the service do not justify disregard of the regulations in this instance just because the registrant is expected to refuse induction.
Ill
REJECTION OF THE COUNSELOR’S TESTIMONY
We need not consider the rejection by the trial court of the testimony of appellant’s counselor. Such proffered testimony would support his claim that his conscientious beliefs matured after the induction notice was sent. That claim need not be passed on in view of the disposition of this appeal.
Reversed.
. The regulation which governs applications such as appellant’s is 32 C.F.R.
§ 1625.2, which states in part:
“The local board may reopen and consider anew the classification of a registrant * * * if such request is accompanied by written information presenting facts not considered when a registrant was classified which, if true, would justify a change in the regisfront's classification; * * * provided, * * * the classification of a registrant shall not be reopened after the local board has mailed to such registrant an Order to Report for Induction * * * unless the local board first specifically finds that there has been a change in the registrant’s status resulting from circumstances over which the registrant had no control.”
. Tlie examination given appellant on September 17, 1965 is described by the regulations as follows:
“c. Scope of the medical examination.-
A complete medical examination will consist of an evaluation of—
(1) Examinee’s medical history, and
(2) Medical examination finding comprising a clinical evaluation, laboratory findings, and other measurements and findings as prescribed by chapter 10, AR. 40-501.” AR 601-270, ch. 3, § III, para. 68c at 3-18 (1965).
The physical inspection which appellant was not given when he reported for induction is described as follows:
■•(2) Scope of physical inspection.
The examining physician will review the previous medical examination reports (SE’s 88 and 89) and any accompanying additional documents and discuss with the examinee any intervening injuries and illnesses, or any other health problems not a matter of record. Tbe examinee, with clothing removed, will be closely observed by the examining physician to detect the presence of any communicable diseases and apparent defects not previously recorded. * * AR 601-270, cli. 3, § III, para. 69(2) at 3-23 (1965).
. The cases which we have found, and which might be construed to hold such a denial unprejudicial, are distinguishable. Miller v. United States, 169 F.2d 805 (6th Cir. 1948) and United States v. Coon, 153 F.Supp. 96 (D.Utah), appeal dismissed, 249 F.2d 320 (10th Cir. 1957) are cases in which the holding of the courts was that the registrants were not entitled to physical examinations under the regulations applicable. The registrant in Johnson v. United States, 285 F.2d 700 (9th Cir. 1960) contended the local board order to report for work of national importance was invalid because he was not given a physical examination within 120 clays of the reporting date. His contention was rejected. The court did not specify whether its decision was based on lack of right to an examination or lack of prejudice from denial of the examination. But the only cases cited by the court in support of its decision on this issue, United States v. Manns, 232 F.2d 709 (7th Cir. 1956) and Miller v. United States, supra, held that registrants were not entitled to physical examinations. Thus it seems appropriate to restrict Johnson to an identical holding.
Question: What is the number of the section from the title of the most frequently cited title of the U.S. Code in the headnotes to this case, that is, title 50? Answer with a number.
Answer:
|
songer_treat
|
D
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
SINDELAR et al. v. LIBERTY MUT. INS. CO.
No. 9123.
Circuit Court of Appeals, Seventh. Circuit.
May 9, 1947.
Rehearing Denied June 19, 1947.
Vincent O’Brien, John Merrill Baker, John H. Letsinger, and Defrees, Fiske, O’Brien & Thomson, all of Chicago, Ill., for appellants.
James J. McKenna and B. S. Quigley, both of Chicago, Ill., lor appellee.
Before SPARKS and MAJOR, Circuit Judges, and LINDLEY, District Judge.
MAJOR, Circuit Judge.
This is an appeal from a judgment dismissing plaintiff’s suit for failure to state a cause of action. The complaint so far as now material alleges that Joseph C. Sindelar while president of E. W. A. Rowles Co. was accidently injured on March 23, 1944, in an automobile accident while engaged in the performance of duties for and on behalf of E. W. A. Rowles Co.; that, as a result of these injuries, he was totally incapacitated and was confined to a hospital for medical, surgical and nursing care for a period beginning with the date of his injury on March 23, 1944, and ending with his death on December 1, 1944; that on March 31, 1943, the defendant issued to the E. W. A. Rowles Co. the standard workmen’s compensation and employers’ liability policy set out haec verba in the complaint; that said policy was in full force and effect from March 31, 1943 to March 31, 1944, and that during said period the defendant required E. W. A. Rowles Co. to pay, and it did pay, to defendant premiums thereon computed on the remuneration earned by its employees, including the remuneration earned by Joseph C. Sindelar as president.
The complaint contained two counts. In the first, the plaintiff Robert J. Sindelar, as executor of the estate of Joseph C. Sinde-lar, deceased, sought recovery for medical, surgical and hospital expenses incurred following decedent’s fatal accident on March 23, 1944, and for disability benefits accruing to decedent. In the second count, Carolyn L. Sindelar, surviving widow of Joseph C. Sindelar, deceased, seeks recovery for death benefits.
The sole question for decision is whether the policy sued upon provided insurance against accidental injuries sustained by Joseph C. Sindelar, president of E. W. A. Rowles Co., such injuries having been sustained while performing duties in his official capacity, which he or persons acting in his behalf are entitled to recover by direct action against the insurer.
A decision requires a construction of the policy sued upon and therefore presents a question of law. The meaning attributed by the respective parties to certain provisions of the policy is such that it appears essential to relate and analyze in some detail those in dispute.
The policy is entitled “Standard Workman’s Compensation and Employers’ Liability Policy,” the introductory clause reading as follows:
“Does hereby agree with this Employer, named and described as such in the Declarations forming a part hereof, as respects personal injuries sustained by employees, including death at any time resulting therefrom as follows * *
Then follow a number of paragraphs included in the basic policy and also an endorsement entitled “Workmen’s Compensation Endorsement” (afterwards referred to as the endorsement), which also contains a number of paragraphs. Paragraph One (a) to some extent, paragraph One (b) to a lesser extent, and particularly paragraph Five and certain provisions contained in the endorsement afford the main subject matter of the controversy. In fact, plaintiffs’ cause of action is predicated largely upon paragraph Five in connection with the provisions contained in the endorsement. Notwithstanding this, it is necessary to have in mind the language of One (a) and One (b), and particularly the former, in order to understand the controversy relating to Five and the policy endorsement. Paragraph One (a) agrees:
“To pay promptly to ány person entitled thereto, under the Workmen’s Compensation Law [Ill.Rev.Stat.194S, c. 48 § 138 et seq.] and in the manner therein provided, the entire amount of any sum due, and all installments thereof as they become due,
“(1) To such persons because of the obligation for compensation for any injury imposed upon or accepted by this Employer under such of certain statutes, as may be applicable thereto, cited and described in an endorsement attached to this Policy, each of which statutes is herein referred to as the Workmen’s Compensation law, and “(2)”.
Then follows the promise to pay for medical, surgical, funeral and like expenses as required by the Workmen’s Compensation Law. By the endorsement, the Workmen’s Compensation Act referred to is that of Illinois (afterwards referred to as the Illinois Act).
It is plain that this paragraph standing alone limits the protection to the liability imposed by the Illinois Act. While there is no dispute but that the word “employees” contained in the introductory clause is sufficiently broad to include officials of a corporation, it is conceded by plaintiffs that an emploj-cr corporation is not liable under the Illinois Act to its officers unless they are injured while performing duties which are common to an ordinary workman. It is also conceded that the deceased at the time of receiving his injuries was acting in his capacity as president of the corporation and therefore was not covered by the Illinois Act.
By paragraph One (b) the company agrees to indemnify the employer against, damages sustained by its employees as a result of the employer’s negligence. We need not set forth this paragraph in detail as we think it has little if any materiality to the question before us. Plaintiffs concede, consistent with their complaint, that the injury sustained by the deceased was not the result of negligence on the part of the corporation. Furthermore, plaintiffs, even though such injury had been sustained as a result of the employer’s negligence, could not proceed against the insurer until a judgment had been obtained against the employer. Paragraph G of the policy so provides. In other words, One (b) is solely an indemnifying provision. On the other hand, One (a) is an insurance provision running directly to such employees as come within its terms, the amount recoverable for injuries being fixed by the Illinois Act.
The real controversy, therefore, is whether the coverage provided by One (a) was enlarged or extended by subsequent provisions to include the decedent who admittedly was not covered by the Illinois Act' because of the character of service he was performing at the time of his injury.
This brings us to paragraph Five, which in the main forms the basis for plaintiffs’ contention. It provides:
“This agreement shall apply to such-injuries sustained by any person or persons employed by this Employer whose entire remuneration shall be included in the total actual remuneration for which provision is hereinafter made, upon which remuneration the premium for this Policy is to be computed and adjusted, and, also to such injuries so sustained by the President, any Vice-President, Secretary or Treasurer of this Employer, if a corporation. (Italics ours.) The remuneration of any such designated officer shall not be subjected to a premium charge unless he is actually performing such duties as are ordinarily undertaken by a superintendent, foreman or workman.”
The last sentence of this paragraph indicates that it was the purpose to collect premiums only upon that part of a corporate officer’s salary earned while performing the duties of a workman. In other words, that sentence is consistent with defendant’s contention that a corporate officer was to be insured under One (a) only when he was performing services within the Illinois Act. However, this sentence is completely nullified by paragraph Six of the endorsement which provides :
“If this Employer is a corporation, the entire remuneration of the President * * * shall be disclosed and premium shall be paid thereon * *
Plaintiffs argue that paragraph Five, in connection with the endorsement, has the effect of increasing the coverage by including employees not covered by One (a) and particularly the officials of a corporation, regardless of the work in which they were engaged at the time of receiving an injury. On the other hand, defendant contends that the purpose of this paragraph is to define the class of employees who are protected under One (a) and One (b). In other words, this paragraph was merely to clear an ambiguity residing in One (a) and One (b) as to the class of employees who were intended to be protected.
We are of the opinion that there is not the slightest ambiguity as to those who are covered under either One (a) or One (b). As already shown, One (a) applies to all employees entitled to the protection of the Illinois Act, and such Act is made a part “of this contract as fully and completely as if written herein.” The Illinois Act specifically defines those who are covered and those who are not. If an employee is under the Illinois Act, he is automatically entitled to the coverage provided by One (a). Otherwise, he is entitled to nothing. It would be just as reasonable to argue for an ambiguity in One (a) as to the amount of coverage. This, however, even though not specified, is made certain and definite by reference to the Illinois Act. Paragraph One (b) is equally free from ambiguity. It indemnifies the employer for all liability imposed by law on account of damages awarded its employees because of injuries. From its very nature, there could have been no reason for classifying the employees against whom the employer was indemnified.
We have had much difficulty in attempting to comprehend defendant’s argument regarding paragraph Five and the purpose ascribed thereto. In its brief, after conceding that “Paragraph 6 of the compensation endorsement provides that the employer shall pay a premium on the earnings of all officials,” it states: “So now Clause Five reads in effect ‘This agreement applies to every one on the payroll — including officials.’ * * * In other words, Clause Five is amended by Paragraph 6 to mean that everyone is subject to the Policy if the Insurance Carrier collects a premium on him.” Defendant’s contention is finally summarized thus:
“In other words, there is nothing in Clause Five which says that anybody is to get any rights which are not described in the paragraphs before Clause Five. It merely says that everybody who works for this employer is included in the contract. It does not say that the contract is enlarged for those enumerated in Clause Five to give them something more than that which has already been provided. It merely lists the kind of people who are considered employes for whose benefit Clause One (a) was enacted and against whose demands Clause One (b) was enacted.”
Thus, defendant concedes that it collected a premium upon all the salaries of the insured’s officials including that earned in an executive capacity, as provided by paragraph Five and the endorsement, concedes that they are thereby made subject to the policy and are included in the contract, but argues that they are not entitled' to any benefits under the Policy because they are not employees either under paragraph One (a) or One (b). This would be an appealing argument if made as an inducement for the sale of the policy, but it is not persuasive when made to escape liability. Under defendant’s interpretation, paragraph Five serves no purpose. It is meaningless. In fact, as to that portion of the paragraph applicable to corporate officials, the defendant so admits. In its brief it states: “So because of paragraph 6 [of the endorsement] the rest of Clause Five— after the second word in line 6th — is meaningless and could be stricken.” This concession under defendant’s theory could as well be made to the entire paragraph.
Paragraph Five expressly makes the policy applicable “also to such injuries so sustained by the President, any Vice-President, Secretary or Treasurer of this Employer, if a corporation.” The very language itself indicates a purpose to extend the agreement in some manner to injuries sustained by the officers of the corporation beyond that provided for in (a) or (b).' As shown, the president was already covered by the former when performing duties common to a workman and by the latter for injuries due to the negligence of the corporation. A reasonable interpretation of the clause, therefore, indicates that it was intended to include a situation of the instant character where an official was injured when performing executive duties. This interpretation is strengthened by the fact that defendant required and collected premiums upon the entire earnings of the decedent.
It is also pertinent to note that the policy contains no express limitation of liability such as the defendant now seeks to invoke. While it is true that an insurer is only liable to pay in accordance with its promises, this omission of express limitation is significant in view of the long continued use of this particular form of policy and the controversy which it has engendered. Furthermore, a careful analysis of the policy reveals other language favorable to the construction sought by the plaintiffs. Paragraph One (a) makes the provisions of the Workmen’s Compensation Act a part of the contract “so far as they apply to compensation or other benefits for any personal injury or death covered' by this Policy.” Thus the injuries referred to are not limited to those covered by the Illinois Act but include those covered by the policy. This is some indication that injuries other than those covered by the Act were, or at least might be, included in the policy. Again, paragraph D provides: “The obligations of Paragraph One (a) foregoing are hereby declared to be the direct obligations and promises of the Company to any injured employee covered hereby.” Use of the word “hereby” rather than “thereby” appears to be a recognition of direct obligations other than those covered by One (a).
The policy, in addition to the Workmen’s Compensation Endorsement, also has an Occupational Diseases Act Endorsement. Each of these endorsements provides for cancellation without affecting the coverage provided by the other. Paragraph 2 of the Workmen’s Compensation Endorsement provides:
“Insurance afforded under this Policy, in its application to this Act and to personal injuries by accident in operations which are necessary, incident or appurtenant to, or connected with, the business operations subject to this Act, [italics ours] is separate and distinct' from, and may be canceled independently of, any insurance which may be afforded under the Workmen’s Occupational Diseases Act of Illinois.”
Thus it appears that two kinds of insurance are referred to, (1) that under the Act (meaning the Workmen’s Compensation Act) and (2) that described by the language which we have italicized. Defendant says this clause makes no reference to paragraph Five. True, it makes no express reference thereto but it does expressly include “insurance afforded under this Policy.” The language does not refer to the coverage provided under One (b) as provision is later made in the same paragraph for cancellation under One (b). The italicized language applies to the character of operations engaged in by the deceased at the time he received his injuries. Again, the language appears to be a recognition that the coverage of the policy is broader than that afforded by the Illinois Act, as specified in One (a).
We think the situation presented calls for an application of the well known rule that a policy must be construed so as to give effect to all of its provisions if possible and not eliminate some of them as meaningless, as defendant would have us do. It calls for another equally well recognized rule, that in the construction of such policies ambiguities will be resolved in favor of the insured. Applying these rules of construction in connection with our study and analysis of the policy, we are of the opinion that plaintiffs stated a cause of action, against the defendant. In reaching this conclusion we have studied and taken into consideration the numerous cases relied upon by the parties in support of their respective contentions.
No good purpose could be served in entering into a detailed discussion concerning such cases. This being an Illinois contract, we are obligated first to look to the court decisions of that State for guidance. Unfortunately there is no Illinois case exactly in point. By analogy, however, Morris v. Central West Casualty Co., 351 Ill. 40, 183 N.E. 595, is helpful. There the court construed a contract similar to the one in the instant case. The policy was issued to Morris as an employer. Obviously he was not a person entitled to compensation under the Illinois Act. Being an individual employer and not a corporation, he did not come within paragraphs One (a) or Five of the standard form. An endorsement, however, was attached to the policy which was quite similar to the language of paragraph Five in connection with the endorsement in the instant suit. In substance, it provided: “* * * the policy * * * is hereby specifically extended to apply to injuries * * * suffered by the employer * * * in the same manner and under the same conditions as it would apply to injuries and/or death suffered by an employee.” The court construed this endorsement as being an extension to the coverage provided in the standard form, and in doing so stated (351 Ill. 45, 183 N.E 597) :
“The manner or condition of the injury or death and the extent of the defendant’s liability would be determined by the provisions cf the Compensation Act. In other words, the defendant and Morris mutually agreed that the Compensation Act should be the standard to determine the defendant’s liability under the policy and rider, and that, when such liability was thus determined, the provisions of the act should be also used as the yard-stick to measure the money payment incurred by the liability * * *.”
In other words, the court held that Morris, while not under the Illinois Act and not entitled to the benefits thereof, was covered by the endorsement and that the amount of recovery was determinable by reference to the Illinois Act. Plaintiffs’ measure of damages in the instant case, so’ we think, must be determined in like manner. Furthermore, the Morris case is authority for the proposition that notwithstanding the limited coverage of paragraph One (a) of the policy in the instant suit, the parties may by subsequent agreement enlarge such coverage. We think it immaterial whether they did so by a subsequent paragraph in the original policy or by an endorsement thereto or by a combination thereof.
The Supreme Court of Indiana in American Mutual Liability Ins. Co. of Boston v. Duesenberg, 214 Ind. 488, 14 N.E.2d 919, 16 N.E.2d 698, 117 A.L.R. 1293, had before it exactly the same form of policy as is here involved. It construed paragraph Five as extending the coverage so as to protect an officer of a corporation against accidental injury to the same extent and in the same amount as if he were under the Compensation Act.
Defendant relies strongly upon Wood v. Employers’ Liability Assur. Corp., 41 F.2d 573, a decision of this court. A reading of the opinion, however, discloses that it is not a precedent controlling of the instant situation, and this notwithstanding that some of the reasoning appears to support defendant’s argument. In the first place, the court was considering an endorsement provision which was sought to be made applicable to an employee engaged in farming and who, therefore, was not covered by the Indiana Compensation Act. The question was whether the endorsement was sufficient to cover one thus engaged. There was no corporation or official involved and consequently the court had no occasion to construe paragraph Five.
Furthermore, the Wood case, decided prior to Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, is doubtful authority inasmuch as we are now obliged to apply the law of the State wherein the contract is made. Although the Wood decision involved an Indiana contract, it certainly would not now be controlling if an Indiana contract were involved for the reason that the Indiana court, as shown, has decided the question here presented against the insurer. Furthermore, the Wood case, even if in point, is of doubtful authority in the instant case which involved an Illinois contract in view of the decision of the Supreme Court of Illinois in the Morris case.
We reach the conclusion that the court /! erred in dismissing plaintiff’s complaint. The judgment of dismissal is therefore reversed and the cause remanded with directions to proceed in accordance with the views herein expressed.
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
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songer_typeiss
|
D
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the general category of issues discussed in the opinion of the court. Choose among the following categories. Criminal and prisioner petitions- includes appeals of conviction, petitions for post conviction relief, habeas corpus petitions, and other prisoner petitions which challenge the validity of the conviction or the sentence or the validity of continued confinement. Civil - Government - these will include appeals from administrative agencies (e.g., OSHA,FDA), the decisions of administrative law judges, or the decisions of independent regulatory agencies (e.g., NLRB, FCC,SEC). The focus in administrative law is usually on procedural principles that apply to administrative agencies as they affect private interests, primarily through rulemaking and adjudication. Tort actions against the government, including petitions by prisoners which challenge the conditions of their confinement or which seek damages for torts committed by prion officials or by police fit in this category. In addition, this category will include suits over taxes and claims for benefits from government. Diversity of Citizenship - civil cases involving disputes between citizens of different states (remember that businesses have state citizenship). These cases will always involve the application of state or local law. If the case is centrally concerned with the application or interpretation of federal law then it is not a diversity case. Civil Disputes - Private - includes all civil cases that do not fit in any of the above categories. The opposing litigants will be individuals, businesses or groups.
In re NATIONAL AIRCRAFT CORPORATION. DUGGAN v. SANSBERRY. NATIONAL AIRCRAFT CORPORATION v. SAME.
Nos. 8655, 8656.
Circuit Court of Appeals, Seventh Circuit.
April 21, 1945.
Rehearing Denied June 11,1945.
George O. Durham, Jerome F. Duggan, and Noah Weinstein, all of St. Louis, Mo., and Philip B. O’Neill, of Anderson, Ind. (B. Sherman Landeau and Max Sigoloff, both of St. Louis, Mo., of counsel), for appellants.
Ralph Bamberger, Isidore Feibleman, Julian Bamberger, and Charles B. Feibleman, all of Indianapolis, Ind., and Conrad S. Arnkens, of Anderson, Ind., for appellee.
Before SPARKS and MAJOR, Circuit .Judges, and BRIGGLE, District Judge.
SPARKS, Circuit Judge.
This appeal is from an order of the District Court of the Southern District of Indiana entered on June 5, 1944. That order denied separate petitions for review of a previous order, purporting to be presented by National Aircraft Corporation of Indiana, hereafter referred to as National, whose principal place of business and all of its assets are located in that State, and by James F. Duggan, trustee of the estate of Christopher Engineering Company of Missouri, hereafter referred to as Christopher, whose principal place of business is St. Louis. The order sought to be reviewed was entered May 3, 1944, and confirmed a sale of National’s major assets by Sansberry, its trustee in bankruptcy.
The issue here presented involves a clash of jurisdiction between the district courts of Southern Indiana, and the Eastern Division of the Eastern District of Missouri.
The principal question for our decision is whether the District Court of Missouri had jurisdiction on April 19, 1944, to decree as it did, “That the National Aircraft Corporation is a wholly owned subsidiary of the Christopher Engineering Company * * * the principal debtor herein, and is entitled to file its petition in these proceedings of the parent company,” and to order appellee, the trustee appointed by the Indiana Court, to turn over all assets of National to a trustee appointed by itself. That question is to be decided from the following undisputed facts.
On December 27, 1943, Christopher filed its petition, in the District Court of Missouri, for reorganization under ' Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 501 et seq. The petition was approved by that court and Duggan was appointed trustee. The resolution relied upon as authority for filing such petition did not purport to be an act of that corporation. It was signed only by A. B. Christopher, President, and J. M. Brown, Vice-President, and the name of the Company nowhere appears with the other signatures. They therein described themselves as owning a majority of the shares of stock of the Christopher Company and as constituting a majority of its board of directors. They further described Joe Dubman as the minority of the Board of Directors, who, on account of his hostility to the majority of the Board, had instituted a suit in the Missouri State Court for the appointment of a receiver for that Company. Under those conditions they said it was impossible to hold a formal meeting of the directors or stockholders, and they therefore ordered themselves, or either one, as President or Vice-President respectively, of the Christopher Company, to file that Company’s petition for reorganization. The petition was signed by the debtor by A. B. Christopher, President, and verified by his oath.
On January 21, 1944, an involuntary petition in bankruptcy was filed against National in the District Court of Indiana, by certain of its creditors. On February 8, 1944, in that proceeding, National was adjudicated a bankrupt, an order of reference was made, and Sansberry was appointed receiver. On March 7, 1944, Sansberry was elected trustee by the creditors, took possession of the assets, and on March 21, 1944, he filed a petition before the Indiana referee to sell them. On April 6, 1944, the referee ordered the trustee to sell those assets on April 20, 1944.
J. M. Brown, a stockholder and director of Christopher, was also secretary of National when it was adjudicated a bankrupt. On April 19, 1944, he caused an intervening petition to be filed on behalf of National in Christopher’s reorganization proceedings in Missouri, thereby seeking reorganization of National as a subsidiary of Christopher. That petition -was signed “National Aircraft Corporation, a corporation, By J. M. Brown, Petitioner.” It was verified by Brown’s oath, which stated that he was Secretary of National, and that he was duly authorized to make the petition and affidavit in National’s behalf. There was no showing as to how or by whom he was thus authorized. Moreover, the petition disclosed to that court that National had been adjudicated a bankrupt by the District Court in Indiana; that Sansberry had been appointed trustee, had taken possession of all the assets of National, and by order of that court had advertised a sale of such assets, beginning the next day at the debtor’s place of business in Indiana, and that unless restrained by the District Court of Missouri, the sale would proceed as advertised. On the same day the District Court of Missouri found, “That the National Aircraft Corporation is a wholly owned subsidiary of the Christopher Engineering Company * * * the principal debtor herein, and is entitled to file its petition in these proceedings of its parent company.” Thereupon the injunction issued on April 19, and was served upon Sansberry, Trustee, and his auctioneer the next morning at 9:30, the time scheduled for the sale to begin. The sale proceeded as advertised, a report thereof was made by the trustee to the referee on April 21, and it was approved by that referee on May 3, 1944.
On May 10, 1944, James F. Duggan as trustee of the estate of Christopher, and trustee of the estate of National (by virtue of the appointments of the District Court in Missouri) filed a petition in the District Court in Indiana to stay further proceedings in that court, and to set aside all orders made by it with respect to National on or after April 19, 1944. That court, -as requested, reviewed such orders and confirmed the sale on June 5, 1944. Duggan, as trustee of both debtors, gave notice of appeal.
It is conceded by appellants that the District Court in Indiana had jurisdiction of National and its assets prior to April 19, 1944. However, they contend that by virtue of section 129 of Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 529, the jurisdiction in the Indiana Court terminated and became lodged in the District Court in Missouri, by reason of the latter’s order on that date with respect to National’s alleged petition for reorganization. Before there could be jurisdiction in the latter court, we think it must have been established that National was a subsidiary of Christopher, not only on April 19, 1944, but on December 27, 1943, when Christopher filed its petition for reorganization, and also on January 21, 1944, when the involuntary petition in bankruptcy against National was filed in Indiana. Unless it had such a status at the earlier dates, the fact that it became a subsidiary at the later date was insufficient under the applicable provisions of the Bankruptcy Act to confer jurisdiction upon the Missouri Court. These were jurisdictional facts, which of necessity must have been proved before the court in Missouri could possibly obtain jurisdiction of National, or oust the jurisdiction of the District Court in Indiana, and the burden was upon petitioners to establish those facts. This they did not do.
Appellants contend that National was a subsidiary of Christopher because the latter owned all of the former’s capital stock having the power to vote for the election of directors. It is not denied that Christopher, or its trustee, received all such stock, if any, in its possession on April 19, 1944, from A. B. Christopher and J. M. Brown, who, prior to that time, held the majority stock in each corporation.
It is significant that the order of the court in Missouri does not state that Christopher owned any stock of National prior to April 19, 1944. Certainly Christopher, after its petition for reorganization had been approved and a trustee appointed for its estate, would not be permitted to purchase stock of another corporation without that court’s permission, even for the purpose of acquiring a subsidiary. No such order appears to have been made. It would also seem passing strange, after National had been adjudicated a bankrupt, to permit its majority stockholders to transfer their stock to another corporation in order to effectively create a subsidiary for the purpose of taking a change of venue on the alleged subsidiary’s petition for reorganization, and that too when its assets had been advertised for sale without any suggestion whatever to either the court or the debtor’s trustee in Indiana that it desired a reorganization.
On first thought it might seem a captious interpretation of the Missouri court’s order to limit the beginning of the subsidiary relationship to April 19, 1944. However, that is the date selected by that court and we must presume that there was no evidence before it that the relationship existed earlier. If there is any doubt that the court meant what it said in that order, we call attention to further facts before us which seem to fully confirm our interpretation of it. We do not discuss the facts about to be related for the purpose of showing that the court in Missouri erred in deciding the merits of the petition, but rather for the purpose of showing that it was without jurisdiction to enter such order. Of course, if it had jurisdiction, it had the right to decide the merits regardless of whether that decision was right or wrong.
Christopher’s petition for reorganization states among other matters that “The financial condition of your petitioner is fully set forth in the balance sheet as of September 30, 1943 * * annexed hereto and made a part hereof.” This was Christopher’s last balance sheet and it makes no mention of the debtor’s ownership or control of any stock in the National Company, although it purports to set forth a complete list of its assets and liabilities.
On February 25, 1944, J. M. Brown filed his petition under oath with the District Court of Missouri in the proceedings for the reorganization of Christopher. That petition alleged that Brown was the owner of 288% shares of no par value stock Of National; that on or about the 18th day of January, 1944, Duggan, trustee of Christopher, filed his petition for an order directing Brown and A. B. Christopher to forthwith endorse, deliver and surrender to Duggan, trustee, all of their stockholdings and stock certificates in National; that thereupon that court entered an order directing him to endorse, deliver and surrender his stockholdings to Duggan, trustee, the order further providing that the delivery of the stock, pursuant to the order, should not in any way affect Brown’s claim thereto. The petition further alleged that at the time of the entry of that order, Brown was not in the possession of his stock above referred to, for the reason that he had on or about November 29, 1943, endorsed and delivered his said stock to B. Sherman Landau as collateral security for a loan of $6,000 made by Landau to Brown. It was further alleged that Landau complied with the above order and turned over and delivered the shares to Duggan, trustee. The petition further stated that Brown was the absolute owner of the shares delivered by Landau, subject to the lien of Landáu, and that Brown was entitled to immediate possession of them subject to Landau’s lien. The petition prayed that the court enter its order finding that Brown was the sole owner of said shares of stock, subject only to Landau’s lien, and that he was entitled to the possession of them, subject to that lien, and that Duggan, trustee, be directed to forthwith deliver them to Brown, subject to that lien.
B. Sherman Landau was attorney for J. M. Brown when the latter filed National’s petition for reorganization in Missouri. He also filed a separate petition before the District Court in Missouri on February 25, 1944, in which he stated substantially the same facts as set forth in Brown’s petition just mentioned.
On the same date A. B. Christopher also filed his petition in the same court and proceedings, alleging his ' ownership of 288% shares of National’s stock, which petition was substantially identical with Brown’s petition, with the exception that his stock had not been pledged to any one as security. It asked for a return of the stock to himself.
It is significant that the affidavits of Brown and A. B. Christopher state that the trustee’s petition for this order of transfer of stock was filed with the District Court in Missouri, and the order was entered on the very uncertain date of “on or about January 18, 1944.” We are not informed as to whether the true date was before, on or after January 21, the date when the creditors of National filed their involuntary petition in bankruptcy. However, the order specifically provided that the delivery and surrender of such stock, endorsed by its then owners, would not in any way affect the endorsers’ claims thereto. The record is silent as to when the stock was endorsed and delivered to Duggan, trustee, by either Brown, Landau or A. B. Christopher.
Furthermore, at the first meeting of National’s creditors, on March 7, 1944, Brown was present and testified under oath. He said that National was originally organized with local capital at Elwood, Indiana, and that in December, 1942, he and A. B. Christopher purchased all of its capital stock; that while the certificates were turned over to Duggan, trustee of A. B. Christopher in a reorganization proceeding in St. Louis, there was no reason that he knew why such capital should be considered as the property of Christopher Company instead of himself and A. B. Christopher individually. When asked whether National was insolvent at that time, in the sense that the aggregate of its liabilities was in excess of its assets, he answered “It looks to me like it is insolvent, but I would not care to express myself.” He then said that his stock in National was then in his name, and not .in the name of Christopher Engineering Company, but that he had pledged it to Landau to secure a debt, putting up the stock as collateral. He made no objection to the appointment of a trustee for National.
Under these facts we are convinced that the District Court in Missouri, by its order of April 19, 1944, intended to limit the beginning of the subsidiary relation of National to that date, presumably when the stock was actually endorsed and delivered to Duggan, trustee.
As we construe the Bankruptcy Act, after a debtor has been adjudged a bankrupt or its petition for reorganization has been approved, and its property has been turned over to a trustee, its activities with respect to its property are extremely limited. We know of nothing it can do without permission of the court which has rightfully assumed jurisdiction. It is contended by appellants, however, that under section 529, after it has been adjudicated a bankrupt and its property transferred to a trustee, it may file a petition for reorganization in any district court where its parent corporation resides. We are convinced that this is not a proper interpretation of section 529.
Sub-Chapter IV of Chapter X deals with the petition for reorganization, including the right to file and the venue. 11 U.S.C.A. §§ 526-529. They should be construed together.
Section 526 merely provides that a corporate debtor or its creditors may file a petition for reorganization of such debtor, providing there is no pending petition for reorganization of the same debtor.
Section 527 provides that if there is a bankruptcy proceeding pending against the debtor corporation, and we take this to mean an insolvent debtor against or by whom no petition for reorganization has yet been filed, then and in that event such a petition may be filed in that proceeding, either before or after adjudication.
Section 528 provides that if no bankruptcy proceeding is pending against the debtor corporation, and we construe this is to refer to any bankruptcy proceeding, then and in that event an original petition may be filed with the court in whose territorial jurisdiction the corporation has had its principal place of business or its principal assets for the preceding six months.
If a corporation be a subsidiary, as provided in section 529, an original petition for reorganization may be filed by or against the debtor corporation as provided in section 528, or in the court which has approved the parent company’s petition for reorganization.
It will be noted that section 528 deals only with estates where no bankruptcy proceeding of any kind is pending. In that event an original petition is permitted to be filed by the debtor or by its creditors. We interpret this to mean that the petition should be an original one, in the sense that no other petition in bankruptcy is pending in any jurisdiction with respect to the debt- or’s estate. No other interpretation has been suggested. Section 529 contains the same word presumably with the same intended meaning, otherwise the sentence would express an absurdity, because section 528 deals only with estates where no bankruptcy proceeding is pending with respect to such estate. Appellants contend that National was authorized and chose to file its alleged petition under section 529 rather than section 528. However, it is clear there was no authority to choose nor was a choice of jurisdiction made, for National could not then have filed under section 528, because there was then pending in Indiana an involuntary proceeding in bankruptcy against it; and for the further reason that its alleged petition for reorganization in Missouri was not an original one as required by both sections 528 and 529.
The cited sections of the statute seem to fully cover every conceivable contingency pertaining to .the venue of a petition for reorganization of a corporation, and we think our interpretation of them gives full force to each phrase and clause thereof. It is apparent that appellants’ interpretation does not do this. True, section 529 does not contain the words found in section 528 — “If no bankruptcy proceeding is pending.” However, we think the substance of this limitation is contained in section 529-by the requirement that the petition shall be an original one. Such construction gives full effect to every word of the Act, and expresses what we consider the clear intention of Congress.
Moreover, section 529 was not available to either the alleged parent company or its stockholders, or to the stockholders of National, although they seem to have actuated these issues. It was available only to National, because it was the alleged petitioner. National’s name, of course, appears as a signature to the petition, but it was placed there by Brown, not as a director, nor as a stockholder, nor as any other officer of National, but as “Petitioner.” In that petition he does not claim to be a stockholder, nor an agent authorized by National, nor by the District Court of Southern Indiana, to sign or file it. True, in the jurat of the petition he says he is Secretary of National, but he nowhere states or claims that he had authority to file the petition by reason of that fact. Moreover, at the time the District Court in Missouri sought to assume jurisdiction of the petition, and oust the District Court of Indiana of its jurisdiction, and enjoined its referee and other officers from further proceedings in this matter, there were pending in the court in Missouri, the claims under oath of Brown, and A. B. Christopher, asserting sole ownership and the right to possession of the 577 shares of National’s stock, which had been endorsed and delivered to Duggan, trustee in Missouri, with the understanding that such endorsement and delivery would not in any way affect the endorsers’ claims thereto. It is not here denied that this is the alleged transfer of stock upon which appellants rely to establish the subsidiary relationship of National. It seems to us that one of two things is true, and in either case the court in Missouri had no authority to assume jurisdiction of National. If Christopher did not become the rightful owner of this stock by such transfer, then National did not become its subsidiary, and was not authorized to file its alleged petition. On the other hand, if this stock was in good faith actually endorsed and delivered and the ownership transferred to Duggan, trustee, then Brown had no authority, disclosed by this evidence, to file National’s petition for reorganization.
Under the facts presented by .this record, we are convinced that appellee, an officer appointed by the District Court of Indiana and acting under its orders, had no reason to disregard those orders and obey the orders of the Missouri court which acted without statutory authority in entering such orders.
The order is affirmed.
Section 526. “Filing petition; persons entitled
“A corporation, or three or more creditors (having claims aggregating $5000 or more, liquidated as to amount and not contingent as to liability) * * * may, if no other petition by or against such corporation is pending under this chapter, file a petition under this chapter.”
Section 527. “Same; pending bankruptcy proceeding
“A petition may be filed in a pending bankruptcy proceeding either before or after the adjudication of a corporation.”
Section 528. “Same; original petition
“If no bankruptcy proceeding is pending, an original petition may be filed with the court in whose territorial jurisdiction the corporation has had its principal place of business or its principal assets for the preceding six months or for a longer portion of the preceding six months than in any other jurisdiction.”
Section 529. “Same; subsidiary corporation
“If a corporation be a subsidiary, an original petition by or against it may be filed either as provided in section 528 of this title or in the court which has approved the petition by or against its parent corporation.”
Question: What is the general category of issues discussed in the opinion of the court?
A. criminal and prisoner petitions
B. civil - government
C. diversity of citizenship
D. civil - private
E. other, not applicable
F. not ascertained
Answer:
|
songer_weightev
|
A
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?" This includes discussions of whether the litigant met the burden of proof. Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
M. P. FRANK and Beatrice Frank, Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Appellee.
No. 18582.
United States Court of Appeals, Seventh Circuit.
June 14, 1971.
Rehearing Denied, Sept. 29, 1971.
Pell, Circuit Judge, dissented and filed opinion.
Marvin E. Klitsner, William J. Willis, Timothy C. Frautschi, Milwaukee, Wis., for appellants; Foley & Lardner, Milwaukee, Wis., of counsel.
Johnnie M. Walters, Asst. Atty. Gen., Tax Division, Daniel B. Rosenbaum, Joseph M. Howard, Harry Baum, Attys., Tax Division, Dept, of Justice, Washington, D. C., for appellee.
Before SWYGERT, Chief Judge, and FAIRCHILD and PELL, Circuit Judges.
SWYGERT, Chief Judge.
This is a petition to review a decision of the United States Tax Court which determined deficiencies in the federal income taxes for calendar year 1960 paid by petitioners-appellants. The Tax Court determined that taxpayer realized ordinary income in the amount of $530,328.66 during that year due to the exercise on September 28, 1960 of stock options granted in 1958 to M. P. Frank by Mortgage Guaranty Insurance Company (“MGIC”) and Guaranty Insurance Agency, Inc. (“GIAI”), both Wisconsin corporations. Taxpayer appeals the determinations of the Tax Court that: (1) M. P. Frank was an employee of both corporations, and the options were granted by reason of such employment; (2) the options did not have a readily ascertainable market value at the time they were granted; (3) the stock subject to the options was not subject to any restriction which had a significant effect upon its value within the intendment of Treasury Regulations, § 1.421-6(d) (2) (i), so as to preclude taxation of any gain at the time of exercise of the options; and (4) the stock underlying the options had a fair market value of $18.50 per adjusted share at the time of exercise of the options. We affirm the decision of the Tax Court in all respects.
The facts relevant to a determination of this review are recited in meticulous detail in the opinion of the Tax Court, and the statement of facts which follows is only so much as is necessary to understand our disposition of this review. In 1956 taxpayer and two others organized and promoted a Wisconsin corporation under the name of Mortgage Guaranty Insurance Corporation for the purpose of engaging in the business of insuring mortgagees against losses on residential first-mortgage loans. Prior to incorporation, the incorporators adopted a resolution that, in return for their activities (then uncompleted) in organizing the corporation and promoting the sale of the original issuance of stock, the promoters, including taxpayer, would receive an option to purchase 100 shares of stock of MGIC at any time prior to December 31, 1959 for $500 per share, $25 less than the issue price.
In 1957 the organizers and promoters of MGIC also organized and promoted a second Wisconsin corporation under the name of Guaranty Insurance Agency, Inc., for the purpose of selling insurance issued by MGIC and financing the payment of commissions. On January 9, 1957 taxpayer was elected to the board of directors of MGIC and was also made its first secretary-treasurer. On May 6, 1957 he was elected to the GIAI board, and on May 23, 1957 he became GIAI’s first president. Also in 1957 MGIC executed a four-for-one stock split, and the original issue of GIAI stock was distributed to MGIC shareholders at a ratio of one share of GIAI per four shares of MGIC stock held at a price of $25 per share.
Then in 1958, and before any of the three promoters had exercised their 1956 MGIC options, the boards of MGIC and GIAI adopted similar resolutions granting options to taxpayer and the other two promoters to purchase 400 shares at $125 per share and 100 shares at $25 per share, respectively, at any time up to December 31, 1962. In mid-1959 both MGIC and GIAI split their stock eight-for-one, and early in 1960 the 1958 options granted to taxpayer by MGIC and GIAI were revised to reflect the stock splits. Other stock splits occurred before taxpayer’s exercise of the options which were taken into account upon exercise of the options, although no other amendments were made to the options themselves.
Initially, we note that the scope of our review of the trial court’s decision is circumscribed by the proposition that we may reverse findings of fact by the Tax Court only if they are clearly erroneous. That being the case, we conclude that there is sufficiently substantial evidence stated in the opinion of the Tax Court to justify its determinations that taxpayer was an employee of MGIC and GIAI, that both corporations granted the options here in question by reason of such employment, and that the stock underlying the options had a fair market value of $18.50 per adjusted share on September 28, 1960 when the options were exercised. Accordingly, we affirm those determinations without further comment.
As to the determination that the stock subject to the options had no readily ascertainable market value at the time of the granting of the options, we believe we are similarly bound by Duberstein to the clearly erroneous standard. However, because of the importance placed upon that issue by the taxpayer, we are impelled to discuss that issue in spite of the Tax Court’s extensive discussion of it.
Taxpayer contends that the granting of the options to taxpayer in 1958 is the taxable event, if any there be, deriving from the options. He asserts that the stock underlying the options and the options themselves could be valued at the date of granting, and any income taxable to taxpayer must be calculated on the basis of the value of the options at grant. We disagree.
In Commissioner v. LoBue, the Supreme Court held that a compensatory, nontransferable stock option granted by a corporation to an employee generated income to the employee which was taxable at exercise. The Court stated:
It is of course possible for the recipient of a stock option to realize an immediate taxable gain [i. e., at grant]. -x- -x- * The option might have a readily ascertainable market value and the recipient might be free to sell his option.
That statement led by negative implication to the adoption of- Treasury Regulations, § 1.421-6, which incorporates the readily ascertainable standard. Section I. 421-6(c) (3) (ii) of the regulations provides:
[T]he fair market value of the option is not readily ascertainable unless the value of the option privilege can be measured with reasonable accuracy. In determining whether the value of the option privilege is readily ascertainable, and in determining the amount of such value when such value is readily ascertainable, it is necessary to consider—
(a) Whether the value of the property subject to the option can be ascertained ;
(b) The probability of any ascertainable value of such property increasing or decreasing.
The Tax Court held that the options did not have a readily acertainable fair market value at grant, noting that there was conflicting evidence as to whether the underlying stock could be valued and preferring to believe the evidence tending to establish that it could not. The determination of the Tax Court that “the fair market value of the stock here involved, and the probability that such stock would increase or decrease in value could not be ascertained with reasonable accuracy” is clearly correct. The stock of MGIC and GIAI had been the subject of only a few isolated sales to third parties when the options were granted, and there was no market price then available. Indeed, taxpayer’s expert seems to have relied exclusively on the issue price of the stock as the base from which he attempted to determine the value of the options. Moreover, the customary method of using “compara-bles” — stocks of similar businesses which are publicly traded — to ascertain the value of a closely held corporation’s stock could not be used here because MGIC and GIAI were unique in that no other private businesses in the country were involved in a similar enterprise. In addition, MGIC had been in business less than two years, had suffered a net loss of $53,283.14 during 1957 and was to suffer a net loss of $15,770.00 during 1958. GIAI was also a new business and suffered a net loss of $26,722.00 in 1958. Nor has anyone contended that book value has any relation to the fair market value of these stocks. It is clear, therefore, that the stock underlying the options could have no “readily ascertainable market ' value” as envisioned by the Supreme Court in LoBue.
Taxpayer contends in the alternative that, assuming the options were compensatory and had no readily ascertainable market value at grant, he is not required to recognize any income at the date of exercise because the stock underlying the options was subject to a restriction which had a significant effect on its value within the meaning of Treasury Regulations, § 1.421-6(d) (2) (i). Taxpayer asserts as alternative bases for this contention the following facts: (1) the stock was not registered with the Securities and Exchange Commission, and taxpayer would suffer limitations on the types and amounts of possible dispositions deriving from the lack of registration and his position as an insider with the corporation; (2) registration of taxpayer’s shares with the SEC would be unreasonably expensive when viewed with regard to the number and value of shares involved; (3) registration was probably not possible in any event, “since the company was new, struggling and a public offering would look like a ‘bail-out’ to the investing public;” (4) redemption of the shares was not possible because the company was suffering liquidity problems; (5) stock sold by taxpayer would have to be sold subject to investment letter restrictions on the purchaser. In support of his position, taxpayer cites Ira Hirsch, 51 T.C. 121 (1968), as standing for the proposition that restrictions on the transfer of stock deriving from the operation of the Securities Act of 1933 constitute restrictions having a significant effect on the value of stock within the intendment of the regulation. We agree with the taxpayer that Ira Hirsch is indistinguishable from this ease on that point, in spite of the trial court’s efforts to distinguish it. We believe, however, that Ira Hirsch was wrongly decided on this issue, and we decline to follow it.
Ira Hirsch involved the taxability at exercise of the receipt of compensatory stock options relating to stock in a closely held corporation. The stock subject to the option was issued pursuant to a regulation A exemption from registration. The SEC took the position that any sale by Hirsch without prior registration of the stock obtained pursuant to the option would constitute a violation of the Securities Act of 1933. The Tax Court found in Hirsch that the foregoing restriction on transfer deriving from the operation of the Securities Act of 1933 constituted the type of restriction contemplated in Treasury Regulations, § 1.-421-6(d) (2) (i), and recognition of any income deriving from Hirseh’s exercise of the options was deferred.
We believe the Tax Court’s decision in Ira Hirsch is erroneous in that we do not believe restrictions on transferability arising by operation of securities law were intended to be included within the meaning of the applicable Treasury Regulation. Rather, the purpose of the regulation was to defer taxation on exercise of options only where the underlying stock was subject to a contractual limitation which prevented the sale of the stock at its fair market value. In Hirsch the Tax Court makes no mention of Treasury Regulations, § 1.421-6(d) (2) (ii), which contains examples of the operation of section 1.-421-6(d) (2) (i) and provides:
The provisions of subdivision (i) of this subparagraph may be illustrated by the following examples:
Example (1). On November 1, 1959, X Corporation grants to E, an
employee, an option to purchase 100 shares of X Corporation stock at $10 per share. Under the terms of the option, E will be subject to a binding commitment to resell the stock to X Corporation at the price he paid for it in the event that his employment terminates within 2 years after he acquires the stock, for any reason except his death. Evidence of this commitment will be stamped on the face of E’s stock certificate. E exercises the option and acquires the stock at a time when the stock, determined without regard to the restriction, has a fair market value of $18 per share. Two years after he acquires the stock, at which time the stock has a fair market value of $30 per share, E is still employed by X Corporation. E realizes compensation upon the expiration of the 2-year restriction and the amount of the compensation is $800. The $800 represents the difference between the amount paid for the stock ($1,000) and the fair market value of the stock (determined without regard to the restriction) at the time of its acquisition ($1,800), since such value is less than the fair market value of the stock at the time the restriction lapsed ($3,000).
Example (2). Assume, in example (1), that E dies one year after he acquires the stock, at which time the stock has a fair market value of $25 per share. Since the restriction lapses upon E’s death, he realizes compensation of $800 ($1,800 less $1,000) and this amount is includible in E’s gross income for the taxable year closing with his death.
Example (S). Assume that, pursuant to the exercise of an option not having a readily ascertainable fair market value to which this section applies, an employee acquires stock subject to the sole condition that, if he desires to dispose of such stock during the period of his employment, he is obligated to offer to sell the stock to his employer at its fair market value at the time of such sale. Since this condition is not a restriction which has a significant effect on value, the employee realizes compensation upon acquisition of the stock.
Example (k). Assume, in example (3), that the employee is obligated to offer to sell the stock to his employer at its book value rather than at its fair market value. Since this condition amounts to a restriction which has a significant effect on value, the employee does not realize compensation upon acquisition of the stock, but he does realize such compensation upon the lapse of the restriction, such as, for example, his death or the termination of his employment.
We note that each of the four examples contained in the regulation are of the same genre — all which deferred taxation are contractual limitations which prevented the sale of the stock at its fair market value until the limitation lapsed or was otherwise lifted. Moreover, in Revenue Ruling 68-286 the Commissioner advised that the fact that section 16(b) of the Securities Exchange Act of 1934 made a taxpayer liable as an insider to the corporation for profit realized on a sale of stock within six months of its acquisition did not amount to “a restriction which has a significant effect on [the stock’s] value” within the meaning of Treasury Regulations, § 1.-421-6(d) (2) (i). By the same token, the way in which the instant taxpayer is restricted as to the manner in which he may sell his stock by the threat of violating the Securities Act of 1933 is not sufficient in our view to constitute the type of restriction contemplated by the regulation.
In addition, some of the reasons taxpayer has asserted as supporting the proposition that his stock is restricted so as to require deferral of taxation sound in the nature of blockage. Since we here hold that the restrictions to which reference is made in section 1.-421-6 (d) (2) (i) are only limitations of a contractual nature which prevent the sale of the stock at its fair market value, it is obvious that the element of blockage is insufficient to defer recognition of income under the regulation.
Finally, taxpayer asserts that if the option was compensatory then the income derived therefrom must be taxed upon receipt of the option pursuant to the sixteenth amendment to the Constitution. He urges that section 61 of the Internal Revenue Code of 1954 taxes all income when received and that taxing at a later date pursuant to Treasury Regulations, § 1.421-6(d) (1), would exceed the authority conferred by the statute and violate the sixteenth amendment. We reject that contention.
For the foregoing reasons, the decision of the Tax Court is affirmed.
. M. P. Frank, 54 T.C. 75 (1970).
. M. P. Frank and Beatrice Frank filed a joint individual income tax return for the calendar year here in question as husband and wife. Otherwise, Beatrice Frank has no connection with these matters, and the term “taxpayer,” which is sometimes used hereinafter, refers to M. P. Frank.
. At the time of the exercise of the options, MGIC stock and GIAI stock were sold in units consisting of four shares of MGIC and one share of GIAI. The $18.50 per adjusted share value, therefore, refers to the combined value of one share of MGIC stock and one-quarter share of GIAI stock, adjusted to reflect all stock splits occurring between the date of the granting of the options and the date of their exercise.
. M. P. Frank, 54 T.C. 75, 76-85 (1970).
. Commissioner v. Duberstein, 363 U.S. 278, 290-291, 80 S.Ct. 1190, 4 L.Ed.2d 1218 (1960).
. M. P. Frank, 54 T.C. 75, 89-92 (1970).
. 351 U.S. 243, 76 S.Ct. 800, 100 L.Ed. 1142 (1956).
. Id. at 249, 76 S.Ct. at 804.
. T.D. 6540, 1961-1 Cum.Bull. 161.
. M. P. Frank, 54 T.C. 75, 90-92 (1970).
. Id. at 92.
. M. P. Frank, 54 T.C. 75, 96 (1970).
. 17 C.F.R. §§ 230.251-.263 (1970).
. Ira Hirsch, 51 T.C. 121, 135-137 (1968).
. 1966-1 Cum.Bull. 185.
. See Commissioner of Internal Revenue v. LoBue, 351 U.S. 243, 76 S.Ct. 800, 100 L.Ed. 1142 (1956).
Question: Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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songer_appnatpr
|
0
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "natural persons". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
LITTON MICROWAVE COOKING PRODUCTS DIVISION, LITTON SYSTEMS, INC., Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner, United Electrical, Radio & Machine Workers of America, and Local 1139, Intervenor.
Nos. 87-5583, 87-5738.
United States Court of Appeals, Sixth Circuit.
Argued Sept. 20, 1988.
Decided Feb. 27, 1989.
M.J. Diederich (argued), Beverly Hills, Cal., for petitioner/cross-respondent.
Leroy L. Hodge, Pittsburgh, Pa., for in-tervenor.
Aileen Armstrong, Deputy Associate Gen. Counsel, N.L.R.B., W. Christian Schumann, Joseph Oertel (argued), Washington, D.C., Ronald M. Sharp, Director, Region 18, NLRB, Minneapolis, Minn., for respondent/ cross-petitioner.
Before MARTIN and NELSON, Circuit Judges, and CONTIE, Senior Circuit Judge.
BOYCE F. MARTIN, Circuit Judge.
Litton Microwave Cooking Products Division of Litton Systems, Incorporated appeals and the National Labor Relations Board seeks enforcement of an unfair labor practice order issued by the National Labor Relations Board, 283 N.L.R.B. No. 144 (May 15, 1987), which found Litton to be in violation of § 8(a)(1) and § 8(a)(5) of the National Labor Relations Act. We reverse the decision of the Board.
The issue before us concerns the decision of Litton to transfer the production of microwave ovens from its facilities in Minneapolis, Minnesota to its plant in Sioux Falls, South Dakota. Prior to 1977, Litton produced all of its microwave ovens (a domestic countertop oven, an international coun-tertop oven, a commercial oven and a kitchen range with an oven) at facilities located near Minneapolis, where its employees were represented by intervenor United Electrical, Radio and Machine Workers of America and its Local 1139. In 1977, Litton established a new plant in Sioux Falls and began manufacturing domestic coun-tertop ovens. By November 1981, Litton had ceased producing domestic countertop ovens in Minneapolis and was manufacturing all of these particular ovens in Sioux Falls. Before the establishment of the Sioux Falls plant, over 1,200 employees were represented by the Minneapolis bargaining unit. As the number of employees at the Sioux Falls facility increased, the number of employees at the Minneapolis plant decreased through lay-offs until, by November 1981, there were no more than 350 bargaining unit jobs remaining in Minneapolis. During the period from 1977 through 1981, the intervenor union did not contest the transfer of production from Minneapolis to Sioux Falls.
In 1981, Litton and the union began to discuss the relocation of the production of the international countertop ovens. Thomas Phillips, vice president of Human Resources for Litton, told Rocco DeMaio, financial secretary of Local 1139, that Litton was losing $3,000,000 annually on its range business, and, as a result, Litton was beginning a study to determine where it could most effectively manufacture its products. In October 1981, Phillips informed DeMaio that Litton would transfer the production of certain international models to Sioux Falls and would consequently reduce its work force in Minneapolis.
On November 5, 1981, Phillips and De-Maio, along with several other representatives of Litton and the union, met to discuss the transfer of production. DeMaio gave Phillips a letter with a formal request for studies and analyses concerning the relocation of work so that the union would have the information necessary to prepare for Litton a proposal designed to keep jobs in Minneapolis. Phillips denied that Litton had any formal studies or analyses relevant to the transfer of production and also stated that Litton had no obligation to bargain with the union over the decision to transfer work. Phillips maintained, however, that Litton was prepared to discuss the effects of the decision to relocate production. Discussions concerning the union’s request for information continued for several days, as DeMaio asserted repeatedly that the union lacked the information necessary for it to make a proposal regarding the transfer of production. Later that month, Phillips notified DeMaio that the production of the international models would be relocated to Sioux Falls.
In March 1982, Phillips informed DeMaio that Litton was conducting studies concerning the transfer of production of the commercial microwave ovens. On March 9, Phillips and DeMaio met to discuss the relocation of the commercial line to Sioux Falls. DeMaio made a request for information relating to the relocation, which included a request for the same information that he had asked for in his letter of November 5. Phillips advised DeMaio that Litton would share with the union the data it had considered when examining the feasibility of relocating production to Sioux Falls. After several exchanges of letters, Phillips and DeMaio met again on March 19. At this meeting, DeMaio repeated his requests for more information, and Phillips replied that the union had received all relevant information. Phillips also stated that no formal studies or analyses existed. At the final meeting on March 26, DeMaio again requested studies and analyses and declared that he was not prepared to go ahead until he had received the requested information. On that same day, Phillips told DeMaio that Litton had decided to transfer the production of commercial ovens to Sioux Falls.
Following the filing of unfair labor practice charges by the union, the Regional Director of the National Labor Relations Board issued a complaint against Litton. The complaint, as subsequently amended, alleged in relevant part that Litton had violated sections 8(a)(1), (3), (5) and 8(d) of the National Labor Relations Act (29 U.S.C. §§ 158(a)(1), (3), (5) and 158(d)) during 1981 and 1982 by relocating certain bargaining unit work in repudiation of its collective bargaining obligations.
An administrative law judge heard the complaint against Litton during April and June of 1983. On December 9, 1983, the administrative law judge issued his decision, recommending that the complaint be dismissed in its entirety because the management rights clause in the collective bargaining agreement between Litton and the union reserved for Litton the right to relocate production unilaterally.
The union and the General Counsel of the National Labor Relations Board filed exceptions to the . administrative law judge’s decision, and the case was submitted to the Board for decision. On May 15, 1987, a three-member panel of the Board issued a split decision. Two members of the Board joined in a decision to reverse the order of the administrative law judge; they found that Litton had violated sections 8(a)(1) and (5) by failing or refusing to bargain in good faith with Local 1139 concerning the relocation of the international and commercial lines and by failing or refusing to furnish the union with available information necessary for and relevant to the union’s function as bargaining representative. The dissenting member of the Board agreed with the administrative law judge that the management rights clause in the parties’ collective bargaining agreement permitted Litton’s unilateral relocation of its international and commercial lines.
On appeal, the National Labor Relations Board seeks enforcement of its order, arguing that substantial evidence supports its conclusions that Litton violated sections 8(a)(1) and (5) by refusing to bargain over the relocation of production and by refusing to supply available, relevant information to the union. Litton requests that the Board’s decision be set aside because: (1) its decision to transfer production of microwave ovens was not a mandatory subject of bargaining under section 8(d); (2) the management rights clause reserved to it the right to relocate production; (3) the union waived any right it had to bargain over the transfer of production; and (4) it provided the union with available, relevant information. We agree with Litton that the administrative law judge correctly interpreted the management rights clause as reserving Litton’s right to transfer production unilaterally.
Our standard of review is well established. We may not disturb the findings of the National Labor Relations Board where there is substantial evidence on the record considered as a whole to support the Board’s findings. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951). A court reviewing the substantiality of evidence supporting a Board decision “must take into account whatever in the record fairly detracts” from the weight of the evidence, Universal Camera, 340 U.S. at 488, 71 S.Ct. at 464, and the evidence supporting a Board conclusion may be less substantial when an examiner, such as an administrative law judge, has drawn conclusions different from the Board’s than when the examiner has reached the same conclusion. Universal Camera, 340 U.S. at 496, 71 S.Ct. at 468. Although the Board is free to find facts and to draw inferences different from those of the administrative law judge, a “reviewing court has an obligation to examine more carefully the evidence in cases where a conflict exists.” Pease Co. v. National Labor Relations Board, 666 F.2d 1044, 1047-48 (6th Cir.1981); Larand Leisurelies, Inc. v. National Labor Relations Board, 523 F.2d 814, 820 (6th Cir.1975). The significance, on review, of an administrative law judge’s decision largely depends on the importance of witness credibility in the particular case, Universal Camera, 340 U.S. at 496, 71 S.Ct. at 468, and we will not normally disturb the credibility assessments of the Board or an administrative law judge, “who has observed the demean- or of the witnesses.” National Labor Relations Board v. Baja’s Place, 733 F.2d 416, 421 (6th Cir.1984); National Labor Relations Board v. Cement Transport, Inc., 490 F.2d 1024, 1029 n. 5 (6th Cir.1974).
Because the National Labor Relations Board and the administrative law judge reached differing conclusions in this case, it is appropriate for us to examine carefully the evidence supporting the Board’s order. Pease, 666 F.2d at 1047-48; Larand, 523 F.2d at 820. After thoroughly reviewing the record, we conclude that, under the above-described standards, the decision of the Board is not supported by substantial evidence.
Despite the existence of a broadly-phrased management rights clause in the collective bargaining agreement, a majority of the Board found that Litton had refused to bargain over the transfer of production in repudiation of its collective bargaining obligations. We cannot agree with this finding of the Board. The management rights clause reserved for Litton “all of the customary rights of management” including, but not limited to, the right to direct the working force, “to transfer, and to determine size of work force, layoffs, product and production methods.” Thus, the management rights clause not only reserved all of the customary rights of management for Litton but also specifically reserved the right to determine production methods and the size of the work force and the right to lay off workers.
A collective bargaining agreement must, moreover, “be interpreted in light of the ‘common law’ of the shop — a composite of the history and practices of the industry and the disputing company and union.” National Labor Relations Board v. Construction & General Laborers’ Union, 778 F.2d 284, 289 (6th Cir.1985). See also United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 579-80, 80 S.Ct. 1347, 1351-52, 4 L.Ed.2d 1409 (1960). An examination of the history and practices of Litton and the union in this case reveals that the union believed that the collective bargaining agreement permit ted Litton to relocate production unilaterally. For example, the union never challenged the loss of bargaining unit jobs in Minneapolis that resulted from the transfer of domestic countertop oven production to Sioux Falls from 1977 to 1981. Even though the union was aware of the transfer of domestic countertop production and, in its newsletters, attributed the Minneapolis layoffs to the transfer of production to Sioux Falls, the union never requested bargaining over Litton’s relocation of work during the 1977-81 period. In addition, during the 1982 negotiations, Litton proposed a more detailed management rights clause that DeMaio rejected as being unnecessary because Litton had the right to do anything it wanted under the existing management rights clause.
We must also question the substantiality of the evidence supporting the Board’s finding that Litton repudiated its obligation to bargain over the relocation of production because the Board apparently disregarded the administrative law judge’s assessments of the credibility of important witnesses. The administrative law judge observed the demeanor of witnesses Phillips and De-Maio, and stated in his decision that Phillips testified “precisely, unequivocally and unambiguously” while DeMaio was “evasive and clearly bent on making his case.” As a consequence, the administrative law judge discredited DeMaio’s testimony. The Board’s decision rests, in part, upon the testimony of DeMaio, a witness specifically discredited by the administrative law judge who observed his demeanor, and we believe that this disregard of the credibility assessments of the administrative law judge “fairly detracts” from the weight of the evidence supporting the Board’s conclusions. Universal Camera, 340 U.S. at 488, 496, 71 S.Ct. at 464, 468. See also Baja’s Place, 733 F.2d at 421; Cement Transport, 490 F.2d at 1029 n. 5.
The Board argues that the management rights clause did not reserve to Litton the right to relocate production in “clear and unmistakable” language, as required by law, and that Litton therefore violated its collective bargaining obligation to bargain over the transfer of production. See Metropolitan Edison Co. v. National Labor Relations Board, 460 U.S. 693, 708, 103 S.Ct. 1467, 1477, 75 L.Ed.2d 387 (1983); Timken Roller Bearing Co. v. National Labor Relations Board, 325 F.2d 746, 751 (6th Cir.1963). However, given the explicit reference to layoffs and production methods in the management rights clause, the history of uncontested work relocation and layoffs, and the unfavorable assessment by the administrative law judge of the credibility of a witness relied upon by the Board, we conclude that the Board’s position is not supported by substantial evidence.
In summation, we agree with the administrative law judge’s determination that the management rights clause in the collective bargaining agreement reserved for Litton the right to transfer production from Minneapolis to Sioux Falls unilaterally. Litton did not, therefore, violate any obligation to bargain with the union over the relocation of production or to provide the union with information relevant to bargaining over the relocation of work. We consequently find that the National Labor Relations Board’s decision that Litton violated sections 8(a)(1) and (5) by refusing to bargain with the union over the relocation of work and by refusing to provide the union with information relevant to the relocation to be unsupported by substantial evidence. Because we believe that Litton did reserve for itself the right to relocate production, we need not consider and we express no opinion as to whether such relocation of production is, in the absence of a provision effectively reserving the right to transfer production, a mandatory subject of bargaining under § 8(d) of the National Labor Relations Act.
Accordingly, we grant Litton’s petition to review the order of the National Labor Relations Board, and we deny the Board’s cross-application for enforcement of its order.
It is so ordered.
Question: What is the total number of appellants in the case that fall into the category "natural persons"? Answer with a number.
Answer:
|
songer_typeiss
|
A
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the general category of issues discussed in the opinion of the court. Choose among the following categories. Criminal and prisioner petitions- includes appeals of conviction, petitions for post conviction relief, habeas corpus petitions, and other prisoner petitions which challenge the validity of the conviction or the sentence or the validity of continued confinement. Civil - Government - these will include appeals from administrative agencies (e.g., OSHA,FDA), the decisions of administrative law judges, or the decisions of independent regulatory agencies (e.g., NLRB, FCC,SEC). The focus in administrative law is usually on procedural principles that apply to administrative agencies as they affect private interests, primarily through rulemaking and adjudication. Tort actions against the government, including petitions by prisoners which challenge the conditions of their confinement or which seek damages for torts committed by prion officials or by police fit in this category. In addition, this category will include suits over taxes and claims for benefits from government. Diversity of Citizenship - civil cases involving disputes between citizens of different states (remember that businesses have state citizenship). These cases will always involve the application of state or local law. If the case is centrally concerned with the application or interpretation of federal law then it is not a diversity case. Civil Disputes - Private - includes all civil cases that do not fit in any of the above categories. The opposing litigants will be individuals, businesses or groups.
Rafael Capella RIVERA et al., Petitioners, Appellees, v. Tomas CONCEPCION, Warden, et al., Respondents, Appellants.
No. 72-8024.
United States Court of Appeals, First Circuit.
Submitted Oct. 27, 1972.
Decided Nov. 6, 1972.
J. F. Rodriguez-Rivera, Acting Sol. Gen. and Americo Serra, Asst. Sol. Gen., for respondents on motion for stay.
Luis F. Abreu Elias, Rio Piedras, P. R., for petitioners on memorandum in opposition to motion for stay.
Before COFFIN, Chief Judge, ALD-RICH and CAMPBELL, Circuit Judges.
ALDRICH, Senior Judge.
Petitioners were convicted in the Superior Court of Puerto Rico in August 1970, after some 23 trial days, of violating the Commonwealth’s Explosives Law, 25 L.P.R.A. § 492, and for conspiracy, 33 L.P.R.A. § 161. They sought bail pending appeal from the Superior Court, but after a prompt evidentiary hearing this was refused. The Supreme Court of Puerto Rico denied bail in May 1971. In December 1971 petitioners again applied to the Superior Court. In their motion they stated that, although ordered by the court, the transcript of their trial had not been prepared, and that such lengthy incarceration without bail and an opportunity to press their appeal was a denial of due process.
In May 1972, their motion not having been acted upon, petitioners sought ha-beas corpus in the United States District Court. Alleging that they were good bail risks, being lifelong residents of Puerto Rico with no prior criminal record, that there had been no articulated findings and determination that their appeals were frivolous, and that the court stenographers had yet to commence the preparation of their transcript, petitioners claimed a denial of due process. Not wishing to exercise jurisdiction before petitioners had fully exhausted their local rights, the district court ordered them to make a further application to the Supreme Court of Puerto Rico. Petitioners did this, calling the court’s attention to the fact that it was now over two years and the stenographers had yet to commence the transcript. The court denied bail, without a hearing, with the conclusory statement that the appeal was frivolous and that it would be dangerous to the community to allow petitioners to be at large. It did, however, order preferential treatment for the preparation of their transcript.
After this decision, petitioners renewed their claims in the district court and the court entered an order that they be released on bail upon a setting of the amount needed. In support of its order the court cited the decision in United States ex rel. Keating v. Bensinger, D.C. Ill.1971, 322 F.Supp. 784, to the effect that it is a violation of a defendant’s Eighth Amendment rights to refuse bail arbitrarily, and that arbitrariness is to be presumed when no supporting reasons were furnished. The Commonwealth sought a stay of this order in this court, and we granted such with a request for a further report of facts from the district court.
This report has now been received. It shows the following. It is the practice in the Puerto Rico Superior Court to have transcripts prepared in chronological order. At the time petitioners’ transcript was requested there were sixteen cases ahead, some of which still remain. We infer that the practice is for the stenographers to prepare transcripts only-in such time as is available after their regular courtroom duties. Even with the order of preference, the court found, it is not expected that petitioners’ transcript will be completed until May 1973. Briefs must then be written. Even if the Court were to expedite the hearing it would seem unreasonable (this is our estimate, not the district court’s; it made none) to expect a decision before September 1973, at which time petitioners will have been in jail for three years.
This court on a number of occasions has taken the position that since the right to bail pending appeal is not absolute, a request by a defendant for release on bail implies an undertaking to prosecute the appeal expeditiously. Upon a fair showing of lack of diligence we have revoked bail regardless of the merits of the appeal. This rule should work both ways. If an appellate court directly, or through the agency of the trial court, refuses bail to an appellant, there should be an implicit obligation on the part of those in authority to permit, and where necessary to assist, in the prompt prosecution and disposition of the appeal. Thus in Odsen v. Moore, 1 Cir., 1971, 445 F.2d 806, where a state prisoner, over a period of months, wrote to the clerk of court inquiring as to the state of his appeal, protesting that nothing was being done by court-appointed counsel, and was “consistently informed by the clerk that all complaints of inaction must be directed to counsel of record”, we said that this was equivalent to holding a case “under advisement for an unconscionable period, as in Dixon v. Florida, 388 F.2d 424 (5th Cir. 1968) and Morgan v. State of Tennessee, 298 F.Supp. 581 (E.D.Tenn.1969)”, and deprived defendant of due process. 445 F.2d at 807.
The district court, picking up the language of “consistently complaining,” felt that the Commonwealth had not been derelict because, petitioners had not made a request for preference. It rested its decision to grant bail upon the Puerto Rico courts’ failure to live up to the requirements of the Bensinger case. At least one member of this court has doubts as to the correctness of Bensin-ger, but none of us has doubts about the correctness of the court’s order. We do not attach the significance it did to counsel’s failure to request preference. It must be self-evident that a defendant who appeals and who seeks bail pending appeal does not wish to stay in jail, and at the least desires his transcript as quickly as possible. The Puerto Rico courts cannot but be aware of their practice with respect to transcripts, and the general consequences thereof. Moreover, as above appears, the consequences to these particular petitioners were fully brought to their attention.
It is true that the Supreme Court of Puerto Rico has found — although in what manner does not appear —that petitioners’ appeals are frivolous. It is also true that the crimes of which petitioners have been found guilty are manifestly reprehensible, and a danger to the community. The finding of guilt, however, so far is only provisional. Petitioners, having appealed, are entitled to have that finding reviewed and their guilt finally passed upon by the full process of law. We, too, do not enjoy the thought of guilty defendants filing frivolous appeals, if that be the ease. But two years of total inaction, however occasioned, while they remain incarcerated seems more than enough. Nor is it to be overcome by a present exercise of diligence and treated as if it had not occurred. Any such rule would mean that a defendant may be freely given improper consideration until the system, or the parties at fault, are caught out. We see no reason to stay further the order of the district court, and we do not. The district court should determine the appropriate amount of bail to assure petitioners’ presence. At this stage the Commonwealth is entitled to no more.
The stenographer — there were three in all —who did the bulk of the reporting is no longer in tlie employ of the Commonwealth and has left Puerto Rieo, making a special problem. It is not, however, the only problem.
Question: What is the general category of issues discussed in the opinion of the court?
A. criminal and prisoner petitions
B. civil - government
C. diversity of citizenship
D. civil - private
E. other, not applicable
F. not ascertained
Answer:
|
songer_treat
|
B
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
Harry PORTNOY, Defendant, Appellant, v. UNITED STATES of America, Appellee.
No. 6067.
United States Court of Appeals First Circuit.
May 1, 1963.
Manuel Katz, Boston, Mass., with whom Paul T. Smith and Raymond J. Dowd, Boston, Mass., were on brief, for appellant.
William F. Looney, Jr., Asst. U. S. Atty., with whom W. Arthur Garrity, Jr., U. S. Atty., and Paul J. Redmond, Asst. U. S. Atty., were on brief, for appellee.
Before HARTIGAN and ALDRICH, Circuit Judges, and GIGNOUX, District Judge.
HARTIGAN, Circuit Judge.
This is an appeal from a judgment of the United States District Court for the District of Massachusetts following defendant’s conviction by a jury on a one count indictment charging him with a violation of Title 18 U.S.C. § 111.
On May 11,1962 a grand jury returned an indictment alleging that defendant “on or about May 9, 1962 at a parking lot located on St. Botolph Street in Boston, Massachusetts, did forcibly assault, resist, oppose, impede, intimidate and interfere with United States Deputy Marshal William H. Baldwin, a person designated in Section 1114 of Title 18 of the United States Code while said William H. Baldwin was engaged in the performance of his official duties and on account of the performance of his official duties, all in violation of Title 18, United States Code, Section 111.”
Defendant pleaded not guilty and seasonably moved to dismiss the indictment because of a failure to allege that defendant was aware, at the time of the alleged offense, that Baldwin (1) “was an officer of the United States” and (2) “was engaged in the performance of his official duties.” This motion was denied.
The case proceeded to trial and following the close of the prosecution’s opening statement — wherein the prosecutor alluded to no prospective proof that the defendant knew the official status of Baldwin — defendant moved for a judgment of acquittal. The trial judge denied this motion also.
At the trial the Government offered testimony that the defendant had virtually run over — with his automobile — a Deputy United States Marshal who had tried to serve him with a subpoena. There was evidence from which a jury could properly have concluded that the defendant had been made aware of the official status of the Deputy Marshal and that he had deliberately plunged his car forward — heedless of the possibility of bodily harm to the Marshal — in order to avert being served.
In this court, defendant raises three contentions. Initially he argues that the indictment was fatally defective because of the failure to allege that defendant knew that Baldwin was a government officer engaged in the performance of his official duties. Second, it is argued that the trial judge erred in denying defendant’s motion for judgment of acquittal following the Government’s opening statement because of the prosecutor’s failure to state that the Government would prove that Baldwin was a Government officer engaged in the performance of his official duties. Finally, defendant urges that the evidence is insufficient to sustain a conviction.
In our view there is no question that there was abundant evidence from which the jury properly could have found the defendant guilty as charged and, consequently, we pass quickly over the defendant’s argument as to the sufficiency of the evidence.
The major issue posed by defendant is where an indictment alleging an assault on a federal officer under 18 U.S.C. § 111, is deficient if it does not allege that the defendant was aware that his victim was a federal officer. The Government argues that scienter on the part of the defendant, as to the official character of the victim, is not an essential element of this type of offense. It argues that the gist of the offense resides in the fact that the defendant has engaged in a certain course of illegal conduct — malum in se — and the additional fact that the victim happens to be a federal officer is relevant only for jurisdictional purposes. In support of this argument, the Government relies largely on the recent decision of the United States Court of Appeals for the Fifth Circuit in Bennett v. United States, 285 F.2d 567, 570 (1960), which squarely sustains the position for which the Government here contends.
The defendant, on the other hand, while recognizing the fact that Bennett is highly apposite, attempts to discredit the result on the basis that the holding is out of consonance with a significant line of cases starting with Pettibone v. United States, 148 U.S. 197, 13 S.Ct. 542, 37 L.Ed. 419 (1893), holding that knowledge of the official character of the officer is an essential element of the offense charged, and an indictment which failed to allege this element is fatally defective. See, e. g., Sparks v. United States, 90 F.2d 61 (6th Cir., 1937); United States v. Miller, 17 F.R.D. 486 (D.C.Vt.1955). Defendant further contends that the authority of Bennett is weakened by the faet that there the court failed even to mention its two prior rulings holding that seienter was an essential element of this type of offense. See, Hall v. United States, 235 F.2d 248 (5th Cir., 1956); Hargett v. United States, 183 F.2d 859 (5th Cir., 1950).
While it may be possible to reconcile these authorities, in our view, it is not essential for us to do so in the instant case. Rather, here we need not reach the question of whether an indictment which failed to allege scienter would be defective because in our view the present indictment did in fact fairly charge the defendant with knowledge of the marshal’s official status.
It is a cardinal principle of our criminal law that an indictment is sufficient which apprises a defendant of the crime with which he is charged so as to enable him to prepare his defense and to plead judgment of acquittal or conviction as a plea to a subsequent prosecution for the same offense. United States v. Cruikshank, 92 U.S. 542, 23 L.Ed. 588 (1895); United States v. Crummer, 151 F.2d 958 (10th Cir., 1945); United States v. Pope, 189 F.Supp. 12 (S.D.N.Y.1960).
An examination of Section 111 shows that it defines the instant offense as assault upon a federal officer “while engaged in or on account of the performance of his official duties.” (Emphasis supplied). Following the words of the statute, the indictment in this case charged that the defendant assaulted the marshal “while (he) was engaged in the performance of his official duties and on account of the performance of his official duties * * We believe that an allegation averring that a defendant embarked upon a given course of conduct “on account of” —or for the reason that — his victim was performing official duties must necessarily imply the defendant’s knowledge or awareness of the cloak of officiality with which his victim was garbed at the critical moment. In other words, it is difficult for us to perceive how an assault could be made “on account of” the performance of the victim’s official duties, without knowledge that the victim either was performing, or had performed official duties which were indeed the impelling motive for the assault. See, Sparks v. United States, supra; see also, Parsons v. United States, 189 F.2d 252, 253 (5th Cir., 1951).
In sum, we believe that the instant indictment fairly apprised the defendant of all the elements of the offense with which he was charged and against which he had to defend. In this day, more than this an accused may not ask. As was stated in Parsons v. United States, supra: “The cynically technical approach which formerly enshrouded the consideration of even the plainest and simplest indictments, and, in many instances, made a mockery of simple justice, no longer governs their consideration.” Id. at 253.
There remains the question of whether the trial judge erred in denying appellant’s motion for judgment of acquittal following the Government’s opening statement because of the prosecutor’s asserted failure to state that the defendant knew that his victim was a federal officer.
We have carefully considered defendant’s contention but believe that where the indictment alleges the elements of the offense and the evidence adduced at the trial touches these elements, the defendant cannot claim prejudicial error for failure of the trial judge to acquit on the basis of a prosecutor’s opening statement.
Judgment will be entered affirming the judgment of the district court.
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
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sc_authoritydecision
|
D
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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the bases on which the Supreme Court rested its decision with regard to the legal provision that the Court considered in the case. Consider "judicial review (national level)" if the majority determined the constitutionality of some action taken by some unit or official of the federal government, including an interstate compact. Consider "judicial review (state level)" if the majority determined the constitutionality of some action taken by some unit or official of a state or local government. Consider "statutory construction" for cases where the majority interpret a federal statute, treaty, or court rule; if the Court interprets a federal statute governing the powers or jurisdiction of a federal court; if the Court construes a state law as incompatible with a federal law; or if an administrative official interprets a federal statute. Do not consider "statutory construction" where an administrative agency or official acts "pursuant to" a statute, unless the Court interprets the statute to determine if administrative action is proper. Consider "interpretation of administrative regulation or rule, or executive order" if the majority treats federal administrative action in arriving at its decision.Consider "diversity jurisdiction" if the majority said in approximately so many words that under its diversity jurisdiction it is interpreting state law. Consider "federal common law" if the majority indicate that it used a judge-made "doctrine" or "rule; if the Court without more merely specifies the disposition the Court has made of the case and cites one or more of its own previously decided cases unless the citation is qualified by the word "see."; if the case concerns admiralty or maritime law, or some other aspect of the law of nations other than a treaty; if the case concerns the retroactive application of a constitutional provision or a previous decision of the Court; if the case concerns an exclusionary rule, the harmless error rule (though not the statute), the abstention doctrine, comity, res judicata, or collateral estoppel; or if the case concerns a "rule" or "doctrine" that is not specified as related to or connected with a constitutional or statutory provision. Consider "Supreme Court supervision of lower federal or state courts or original jurisdiction" otherwise (i.e., the residual code); for issues pertaining to non-statutorily based Judicial Power topics; for cases arising under the Court's original jurisdiction; in cases in which the Court denied or dismissed the petition for review or where the decision of a lower court is affirmed by a tie vote; or in workers' compensation litigation involving statutory interpretation and, in addition, a discussion of jury determination and/or the sufficiency of the evidence.
ATKINSON TRADING CO., INC. v. SHIRLEY et al.
No. 00-454.
Argued March 27, 2001
Decided May 29, 2001
Charles G. Cole argued the cause for petitioner. With him on the briefs were Shannen W. Coffin and William J. Darling.
Marcelino B. Gomez argued the cause and filed a brief for respondents.
Beth S. Brinkmann argued the cause for the United States as amicus curiae urging affirmance. On the brief were Acting Solicitor General Underwood, Acting Assistant Attorney General Cruden, Deputy Solicitor General Kneed-ler, Edward C. DuMont, E. Ann Peterson, and William B. Lazarus.
Briefs of amici curiae urging reversal were filed for the State of South Dakota et al. by Mark W. Barnett, Attorney General of South Dakota, and John Patrick Guhin, Deputy Attorney General, and by the Attorneys General for their respective States as follows: Bill Pryor of Alabama, Ken Salazar of Colorado, Robert A Butterworth of Florida, Jennifer M. Gran-holm of Michigan, Mike Moore of Mississippi, Wayne Stenehjem of North Dakota, W. A Drew Edmondson of Oklahoma, and Jan Graham of Utah; for the Association of American Railroads by Lynn H. Slade, Walter E. Stem, and William C. Scott; for the Interstate Natural Gas Association of America by Michael E. Webster and Neil G. Westesm; for Proper Economic Resource Management, Inc., by Randy Ü Thompson; and for Roberta Bugenig et al. by James S. Burling.
Briefs of amici cwriae urging affirmance were filed for the Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation et al. by William R. Perry and Arthur Lazarus, Jr.; for the Colorado River Indian Tribes et al. by Susan M. Williams; for the Confederated Tribes of the Umatilla Indian Reservation et al. by Michael L. Roy and Jeffrey D. Lemer; and for the Shakopee Mdewakanton Sioux (Dakota) Community et al. by Andrew M. Small and Steven F. Olson.
CHIEF Justice Rehnquist
delivered the opinion of the Court.
In Montana v. United States, 450 U.S. 544 (1981), we held that, with limited exceptions, Indian tribes lack eivü authority over the conduct of nonmembers on non-Indian fee land within a reservation. The question with which we are presented is whether this general rule applies to tribal attempts to tax nonmember activity occurring on non-Indian fee land. We hold that it does and that neither of Montana’s exceptions obtains here.
In 1916, Hubert Richardson, lured by the possibility of trading with wealthy Gray Mountain Navajo cattlemen, built the Cameron Trading Post just south of the Little Colorado River near Cameron, Arizona. G. Richardson, Navajo Trader 136-137 (1986). Richardson purchased the land directly from the United States, but the Navajo Nation Reservation, which had been established in 1868, see 15 Stat. 667, was later extended eight miles south so that the Cameron Trading Post fell within its exterior boundaries. See Act of June 14, 1934, ch. 521, 48 Stat. 960-962. This 1934 enlargement of the Navajo Reservation — which today stretches across northeast Arizona, northwest New Mexico, and southeast Utah — did not alter the status of the property: It is, like millions of acres throughout the United States, non-Indian fee land within a tribal reservation.
Richardson’s “drafty, wooden store building and four small, one-room-shack cabins overlooking the bare river canyon,” Richardson, supra, at 135, have since evolved into a business complex consisting of a hotel, restaurant, cafeteria, gallery, curio shop, retail store, and recreational vehicle facility. The current owner, petitioner Atkinson Trading Company, Inc., benefits from the Cameron Trading Post’s location near the intersection of Arizona Highway 64 (which leads west to the Grand Canyon) and United States Highway 89 (which connects Flagstaff on the south with Glen Canyon Dam to the north). A significant portion of petitioner’s hotel business stems from tourists on their way to or from the Grand Canyon National Park.
In 1992, the Navajo Nation enacted a hotel occupancy tax, which imposes an 8 percent tax upon any hotel room located within the exterior boundaries of the Navajo Nation Reservation. See 24 Navajo Nation Code §§ 101-142 (1995), App. to Pet. for Cert. 102a-124a. Although the legal incidence of the tax falls directly upon the guests, the owner or operator of the hotel must collect and remit it to respondents, members of the Navajo Tax Commission. §§ 104,107. The nonmember guests at the Cameron Trading Post pay approximately $84,000 in taxes to respondents annually.
Petitioner’s challenge under Montana to the Navajo Nation’s authority to impose the hotel occupancy tax was rejected by both the Navajo Tax Commission and the Navajo Supreme Court. Petitioner then sought relief in the United States District Court for the District of New Mexico, which also upheld the tax. A divided panel of the Court of Appeals for the Tenth Circuit affirmed. See 210 F. 3d 1247 (2000).
Although the Court of Appeals agreed with petitioner that our cases in this area "did make an issue of the fee status of the land in question,” id., at 1256, it nonetheless concluded that the status of the land as “fee land or tribal land is simply one of the factors a court should consider” when determining whether civil jurisdiction exists, id., at 1258 (citing 18 U. S. C. § 1151). Relying in part upon our decision in Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982), the court “complemented]” Montana’s framework with a “case-by-case approach” that balanced the non-Indian fee status of the land with “the nature of the inherent sovereign powers the tribe is attempting to exercise, its interests, and the impact that the exercise of the tribe’s powers has upon the nonmember interests involved.” 210 F. 3d, at 1255, 1257, 1261. The Court of Appeals then likened the Navajo hotel occupancy tax to similar taxes imposed by New Mexico and Arizona, concluding that the tax fell under Montana’s first exception because a “consensual relationship exists in that the nonmember guests could refrain from the privilege of lodging within the confines of the Navajo Reservation and therefore remain free from liability for the [tax].” 210 F. 3d, at 1263 (citing Buster v. Wright, 135 F. 947, 949 (CA8 1905)). The dissenting judge would have applied Montana without “any language or ‘factors’ derived from Merrion” and concluded that, based upon her view of the record, none of the Montana exceptions applied. 210 F. 3d, at 1269 (Briscoe, J., dissenting).
We granted certiorari, 531 U.S. 1009 (2000), and now reverse.
Tribal jurisdiction is limited: For powers not expressly conferred upon them by federal statute or treaty, Indian tribes must rely upon their retained or inherent sovereignty. In Montana, the most exhaustively reasoned of our modern cases addressing this latter authority, we observed that Indian tribe power over nonmembers on non-Indian fee land is sharply circumscribed. At issue in Montana was the Crow Tribe’s attempt to regulate nonmember fishing and hunting on non-Indian fee land within the reservation. Although we “readily agree[d]” that the 1868 Fort Laramie Treaty authorized the Crow Tribe to prohibit nonmembers from hunting or fishing on tribal land, 450 U.S., at 557, we held that such “power cannot apply to lands held in fee by non-Indians.” Id., at 559. This delineation of members and nonmembers, tribal land and non-Indian fee land, stemmed from the dependent nature of tribal sovereignty. Surveying our cases in this area dating back to 1810, see Fletcher v. Peck, 6 Cranch 87, 147 (1810) (Johnson, J., concurring) (stating that Indian tribes have lost any “right of governing every person within their limits except themselves”), we noted that “through their original incorporation into the United States as well as through specific treaties and statutes, Indian tribes have lost many of the attributes of sovereignty.” 450 U. S., at 563. We concluded that the inherent sovereignty of Indian tribes was limited to “their members and their territory”: “[Ejxereise of tribal power beyond what is necessary to protect tribal self-government or to control internal relations is inconsistent with the dependent status of the tribes.” Id., at 564 (citing United States v. Wheeler, 435 U.S. 313, 326 (1978) (“[T]he dependent status of Indian tribes ... is necessarily inconsistent with their freedom to determine their external relations” (emphasis deleted))).
Although we extracted from our precedents “the general proposition that the inherent sovereign powers of an Indian tribe do not extehd to the activities of nonmembers of the tribe,” 450 U. S., at 565, we nonetheless noted in Montana two possible bases for tribal jurisdiction over non-Indian fee land. First, “[a] tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealings, contracts, leases, or other arrangements.” Ibid. Second, “[a] tribe may . . . exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.” Id., at 566. Applying these precepts, we found that the nonmembers at issue there had not subjected themselves to “tribal civil jurisdiction” through any agreements or dealings with the Tribe and that hunting and fishing on non-Indian fee land did not “imperil the subsistence or welfare of the Tribe.” Ibid. We therefore held that the Crow Tribe’s regulations could not be enforced.
The framework set forth in Montana “broadly addressed the concept of ‘inherent sovereignty.’ ” Strate v. A-l Contractors, 520 U. S. 438, 453 (1997) (quoting Montana, sufra, at 563). In Strate, we dealt with the Three Affiliated Tribes’ assertion of judicial jurisdiction over an automobile accident involving two nonmembers traveling on a state highway within the reservation. Although we did not question the ability of tribal police to patrol the highway, see 520 U. S., at 456, n. 11, we likened the public right-of-way to non-Indian fee land because the Tribes lacked the power to “assert a landowner’s right to occupy and exclude,” id., at 456. Recognizing that Montana “immediately involved regulatory authority,” we nonetheless concluded that its reasoning had “delineated — in a main rule and exceptions — the bounds of the power tribes retain to exercise ‘forms of civil jurisdiction over non-Indians.’” 520 U.S., at 453 (quoting Montana, supra, at 565). We accordingly held that Montana governed tribal assertions of adjudicatory authority over non-Indian fee land within a reservation. See 520 U. S., at 453 (“Subject to controlling provisions in treaties and statutes, and the two exceptions identified in Montana, the civil authority of Indian tribes and their courts with respect to non-Indian fee lands generally ‘do[es] not extend to the activities of nonmembers of the tribe’” (emphasis added) (quoting Montana, supra, at 565)).
Citing our decision in Merrion, respondents submit that Montana and Strate do not restrict an Indian tribe’s power to impose revenue-raising taxes. In Merrion, just one year after our decision in Montana, we upheld a severance tax imposed by the Jiearilla Apache Tribe upon non-Indian lessees authorized to extract oil and gas from tribal land. In so doing, we noted that the power to tax derives not solely from an Indian tribe’s power to exclude non-Indians from tribal land, but also from an Indian tribe’s “general authority, as sovereign, to control economic activity within its jurisdiction.” 455 U. S., at 137. Such authority, we held, was incident to the benefits conferred upon nonmembers: “They benefit from the provision of police protection and other governmental services, as well as from ‘“the advantages of a civilized society” ’ that are assured by the existence of tribal government.” Id., at 137-138 (quoting Exxon Corp. v. Department of Revenue of Wis., 447 U.S. 207, 228 (1980)).
Merrion, however, was careful to note that an Indian tribe’s inherent power to tax only extended to '“transactions occurring on trust lands and significantly involving a tribe or its members.’” 455 U.S., at 137 (emphasis added) (quoting Washington v. Confederated Tribes of Colville Reservation, 447 U.S. 134, 152 (1980)). There are undoubtedly parts of the Merrion opinion that suggest a broader scope for tribal taxing authority than the quoted language above. But Merrion involved a tax that only applied to activity occurring on the reservation, and its holding is therefore easily reconcilable with the MontanaStrate line of authority, which we deem to be controlling. See Merrion, supra, at 142 (“[A] tribe has no authority over a nonmember until the nonmember enters tribal lands or conducts business with the tribe”). An Indian tribe’s sovereign power to tax — whatever its derivation — reaches no further than tribal land.
We therefore do not read Merrion to exempt taxation from Montana’s general rule that Indian tribes lack civil authority over nonmembers on non-Indian fee land. Accordingly, as in Strate, we apply Montana straight up. Because Congress has not authorized the Navajo Nation’s hotel occupancy tax through treaty or statute, and because the incidence of the tax falls upon nonmembers on non-Indian fee land, it is incumbent upon the Navajo Nation to establish the existence of one of Montana?s exceptions.
Respondents argue that both petitioner and its hotel guests have entered into a consensual relationship with the Navajo Nation justifying the imposition of the hotel occupancy tax. Echoing the reasoning of the Court of Appeals, respondents note that the Cameron Trading Post benefits from the numerous services provided by the Navajo Nation. The record reflects that the Arizona State Police and the Navajo Tribal Police patrol the portions of United States Highway 89 and Arizona Highway 64 traversing the reservation; that the Navajo Tribal Police and the Navajo Tribal Emergency Medical Services Department will respond to an emergency call from the Cameron Trading Post; and that local Arizona Fire Departments and the Navajo Tribal Fire Department provide fire protection to the area. Although we do not question the Navajo Nation’s ability to charge an appropriate fee for a particular service actually rendered, we think the generalized availability of tribal services patently insufficient to sustain the Tribe’s civil authority over nonmembers on non-Indian fee land.
The consensual relationship must stem from “commercial dealing, contracts, leases, or other arrangements,” Montana, 450 U. S., at 565, and a nonmember’s actual or potential receipt of tribal police, fire, and medical services does not create the requisite connection. If it did, the exception would swallow the rule: All non-Indian fee lands within a reservation benefit, to some extent, from the “advantages of a civilized society” offered by the Indian tribe. Merrion, supra, at 187-138 (internal quotation marte and citation omitted). Such a result does not square with our precedents; indeed, we implicitly rejected this argument in Strata, where we held that the nonmembers had not consented to the Tribes’ adjudicatory authority by availing themselves of the benefit of tribal police protection while traveling within the reservation. See 520 U. S., at 456-457, and n. 11. We therefore reject respondents’ broad reading of Montana’s first exception, which ignores the dependent status of Indian tribes and subverts the territorial restriction upon tribal power.
Respondents and their principal amicus, the United States, also argue that petitioner consented to the tax by becoming an “Indian trader.” Congress has authorized the Commissioner of Indian Affairs “to appoint traders to the Indian tribes and to make such rules and regulations as he may deem just and proper specifying the kind and quantity of goods and the prices at which such goods shall be sold to the Indians.” 25 U. S. C. § 261. Petitioner has acquired the requisite license to transact business with the Navajo Nation and therefore is subject to the regulatory strictures promulgated by the Indian Affairs Commissioner. See 25 CFR pt. 141 (2000). But whether or not the Navajo Nation could impose a tax on activities arising out of this relationship, an issue not before us, it is clear that petitioner’s “Indian trader” status by itself cannot support the imposition of the hotel occupancy tax.
Montana’s consensual relationship exception requires that the tax or regulation imposed by the Indian tribe have a nexus to the consensual relationship itself. In Strate, for example, even though respondent A-l Contractors was on the reservation to perform landscaping work for the Three Affiliated Tribes at the time of the accident, we nonetheless held that the Tribes lacked adjudicatory authority because the other nonmember “was not a party to the subcontract, and the [Tjribes were strangers to the accident.” 520 U. S., at 457 (internal quotation marks and citation omitted). A nonmember’s consensual relationship in one area thus does not trigger tribal civil authority in another — it is not “in for a penny, in for a Pound.” E. Ravenseroft, The Canterbury Guests; Or A Bargain Broken, act v, sc. 1. The hotel occupancy tax at issue here is grounded in petitioner’s relationship with its nonmember hotel guests, who can reach the Cameron Trading Post on United States Highway 89 and Arizona Highway 64, non-Indian public rights-of-way. Petitioner cannot be said to have consented to such a tax by virtue of its status as an “Indian trader.”
Although the Court of Appeals did not reach Montana's second exception, both respondents and the United States argue that the hotel occupancy tax is warranted in light of the direet effects the Cameron Trading Post has upon the Navajo Nation. Again noting the Navajo Nation’s provision of tribal services and petitioner’s status as an “Indian trader,” respondents emphasize that petitioner employs almost 100 Navajo Indians; that the Cameron Trading Post derives business from tourists visiting the reservation; and that large amounts of tribal land surround petitioner’s isolated property. Although we have no cause to doubt respondents’ assertion that the Cameron Chapter of the Navajo Nation possesses an “overwhelming Indian character,” Brief for Respondents 18-14, we fail to see how petitioner’s operation of a hotel on non-Indian fee land “threatens or has some direet effect on the political integrity, the economic security, or the health or welfare of the tribe.” Montana, supra, at 566.
We find unpersuasive respondents’ attempt to augment this claim by reference to Brendale v. Confederated Tribes and Bands of Yakima Nation, 492 U.S. 408, 440 (1989) (opinion of Stevens, J.). In this portion of Brendale, per the reasoning of two Justices, we held that the Yakima Nation had the authority to zone a small, non-Indian parcel located “in the heart” of over 800,000 acres of closed and largely uninhabited tribal land. Ibid. Respondents extrapolate from this holding that Indian tribes enjoy broad authority over nonmembers wherever the acreage of non-Indian fee land is minuscule in relation to the surrounding tribal land. But we think it plain that the judgment in Brendale turned on both the closed nature of the non-Indian fee land and the fact that its development would place the entire area “in jeopardy.” Id., at 443 (internal quotation marks and citation omitted). Irrespective of the percentage of non-Indian fee land within a reservation, Montana’s second exception grants Indian tribes nothing ‘“beyond what is necessary to protect tribal self-government or to control internal relations.’ ” Strate, 520 U.S., at 459 (quoting Montana, 450 U.S., at 564). Whatever effect petitioner’s operation of the Cameron Trading Post might have upon surrounding Navajo land, it does not endanger the Navajo Nation’s political integrity. See Brendale, supra, at 431 (opinion of White, J.) (holding that the impact of the nonmember’s conduct “must be demonstrably serious and must imperil the political integrity, the economic security, or the health and welfare of the tribe”).
Indian tribes are “unique aggregations possessing attributes of sovereignty over both their members and their territory,” but their dependent status generally precludes extension of tribal eivil authority beyond these limits. United States v. Mazurie, 419 U.S. 544, 557 (1975). The Navajo Nation’s imposition of a tax upon nonmembers on non-Indian fee land within the reservation is, therefore, presumptively invalid. . Because respondents have failed to establish that the hotel occupancy tax is commensurately related to any consensual relationship with petitioner or is necessary to vindicate the Navajo Nation’s political integrity, the presumption ripens into a holding. The judgment of the Court of Appeals for the Tenth Circuit is accordingly
Reversed.
We also noted that nearly 90 million acres of non-Indian fee land had been acquired as part of the Indian General Allotment Act, 24 Stat. 388, as amended, 25 U. S. C. §331 et seq., which authorized the issuance of patents in fee to individual Indian allottees who, after holding the patent for 25 years, could then transfer the land to non-Indians. Although Congress repudiated the practice of allotment in the Indian Reorganization Act, 48 Stat. 984, 25 U. S. C. §461 et seq., we nonetheless found significant that Congress equated alienation “with the dissolution of tribal affairs and jurisdiction.” Montana, 450 U. S., at 559, n. 9. We thus concluded that it “defie[d] common sense to suppose that Congress would intend that non-Indians purchasing allotted lands would become subject to tribal jurisdiction.” Ibid.
See also South Dakota v. Bourland, 508 U.S. 679 (1993); Brendale v. Confederated Tribes and Bands of Yakima Nation, 492 U.S. 408 (1989).
Respondents concede that regulatory taxes fall under the Montana framework. See 450 U.S., at 565 (“A tribe may regulate, through taxation, ... the activities of nonmembers”).
Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982), for example, referenced the decision of the Court of Appeals for the Eighth Circuit in Buster v. Wright, 135 F. 947 (1905). But we have never endorsed Buster’s statement that an Indian tribe’s “jurisdiction to govern the inhabitants of a country is not conditioned or limited by the title to the land which they occupy in it.” Id., at 951. Accordingly, beyond any guidance it might provide as to the type of consensual relationship contemplated by the first exception of Montana v. United States, 450 U.S. 544, 566 (1981), Buster is not an authoritative precedent.
We find misplaced the Court of Appeals’ reliance upon 18 U. S. C. §1151, a statute conferring upon Indian tribes jurisdiction over certain criminal acts occurring in “Indian country,” or “all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation.” See also Duro v. Reina, 495 U.S. 676, 680, n. 1 (1990). Although § 1151 has been relied upon to demarcate state, federal, and tribal jurisdiction over criminal and civil matters, see DeCoteau v. District County Court for Tenth Judicial Dist., 420 U.S. 425, 427, n. 2 (1975) ("While §1151 is concerned, on its face, only with criminal jurisdiction, the Court has recognized that it generally applies as well to questions of civil jurisdiction [citing cases]”), we do not here deal with a claim of statutorily conferred power. Section 1151 simply does not address an Indian tribe’s inherent or retained sovereignty over nonmembers on non-Indian fee land.
At least in the context of non-Indian fee land, we also find inapt the Court of Appeals’ analogy to state taxing authority. Our reference in Merrion to a State’s ability to tax activities with which it has a substantial nexus was made in the context of describing an Indian tribe’s authority over tribal land. See 455 U.S., at 137-138 (citing Exxon Corp. v. Department of Revenue of Wis., 447 U.S. 207, 228 (1980); Japan Line, Ltd. v. County of Los Arpeles, 441 U.S. 434, 445 (1979)). Only full territorial sovereigns enjoy the “power to enforce laws against all who come within the sovereign's territory, whether citizens or aliens,” and Indian tribes “can no longer be described as sovereigns in this sense.” Duro v. Reina, supra, at 685.
Because the legal incidence of the tax falls directly upon the guests, not petitioner!, it is unclear whether the Tribe’s relationship with petitioner is at all relevant. We need not, however, decide this issue since the hotel occupancy tax exceeds the Tribe’s authority even considering petitioner’s contacts with the Navajo Nation.
The Navajo Tribal Fire Department has responded to a fire at the Cameron Trading Post. See App. to Pet. for Cert. 57a.
The Navajo Nation charges for its emergency medical services (a flat call-out fee of $800 and a mileage fee of $6.25 per mile). See App. 127-129.
See Reply Brief for Petitioners 13-14 and Brief for United States as Amicus Curiae 29 in Strate v. A-l Contractors, O. T. 1996, No. 95-1872.
Although the regulations do not “predude” the Navajo Nation from imposing upon “Indian traders” such “fees or taxes [it] may deem appropriate,” the regulations do not contemplate or authorize the hotel occupancy tax at issue here. 25 GFR § 141.11 (2000).
The record does not reflect the amount of non-Indian fee land within the Navajo Nation. A 1995 study commissioned by the United States Department of Commerce states that 96.3 percent of the Navajo Nation’s 16,224,896 acres is tribally owned, with allotted land comprising 762,749 acres, or 4,7 percent, of the reservation. See Economic Development Administration, V. Tiller, American Indian Reservations and Indian Trust Areas 214 (1995). The 1990 Census reports that that 96.6 percent of residents on the Navajo Nation are Indian. Joint Lodging 182. The Cameron Chapter of the Navajo Nation, in which petitioner’s land lies, has a non-Indian population of 2.3 percent. See id., at 181.
Although language in Merrion referred to taxation as “necessary to tribal self-government and territorial management,” 455 U.S., at 141, it did not address assertions of tribal jurisdiction over non-Indian fee land. Just as with Montana’s first exception, incorporating Merrion’s reasoning here would be tantamount to rejecting Montana’s general rule. In Strate v. A-1 Contractors, 520 U.S. 438, 459 (1997), we stated that Montana’s second exception “can be misperceived.” The exception is only triggered by nonmember conduct that threatens the Indian tribe; it does not broadly permit the exercise of dvil authority wherever it might be considered “necessary” to self-government. Thus, unless the drain of the nonmember's conduct upon tribal services and resources is so severe that it actually “imperil[s]” the political integrity of the Indian tribe, there can be no assertion of dvil authority beyond tribal lands. Montana, 450 U.S., at 566. Petitioner's hotel has no such adverse effect upon the Navajo Nation.
Justice Stevens’ opinion in Brendale sets out in some detail the restrictive nature of “dosed area” surrounding the non-Indian fee land. See 492 U. S., at 438-441. Pursuant to the powers reserved it in an 1855 trealy with the United States, the Yakima Nation dosed this forested area to the public and severely limited the activities of those who entered the land through a “courtesy permit system.” Id., at 439 (internal quotation marks and dtation omitted). The record here establishes that, save a few natural areas and parks not at issue, the Navajo Reservation is open to the general public. App. 61.
See Strate v. A-1 Contractors, supra, at 447, n. 6 (noting that the Yakima Nation ‘detained zoning authority .. . only in the dosed area”); Duro v. Reina, 495 U.S., at 688 (noting that zoning “is vital to the maintenance of tribal integrity and self-determination”).
Question: What is the basis of the Supreme Court's decision?
A. judicial review (national level)
B. judicial review (state level)
C. Supreme Court supervision of lower federal or state courts or original jurisdiction
D. statutory construction
E. interpretation of administrative regulation or rule, or executive order
F. diversity jurisdiction
G. federal common law
Answer:
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songer_appel1_1_3
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E
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "private business (including criminal enterprises)". Your task is to determine what category of business best describes the area of activity of this litigant which is involved in this case.
AIRPORT SHUTTLE SERVICE, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Henry R. Kesterson d/b/a Galaxy Limousine Service, Intervenor.
No. 80-2503.
United States Court of Appeals, District of Columbia Circuit.
Argued Nov. 2, 1981.
Decided April 27, 1982.
James F. Flint, Washington, D. C., for petitioner.
Linda Joachim, Atty., I. C. C., for respondents. Richard A. Allen, Gen. Counsel, Kathleen M. Dollar, Associate Gen. Counsel, I. C. C., Robert B. Nicholson and Susan J. Atkinson, Attys., Dept, of Justice, Washington, D. C., were on the brief, for respondents.
Lawrence H. Schecker, Atty., I. C. C., Washington, D. C., also entered an appearance for respondents, I. C. C.
Chester A. Zyblut and R. Emery Clark, Washington, D. C., were on the brief, for intervenor.
Before LUMBARD , Senior Circuit Judge of the United States Court of Appeals for the Second Circuit, and ROBB and MIKVA, Circuit Judges.
Opinion for the Court filed by Circuit Judge ROBB.
Sitting by designation pursuant to 28 U.S.C. § 294(d) (1976).
ROBB, Circuit Judge:
The petitioner, Airport Shuttle Service, Inc., asks us to review a decision by the Interstate Commerce Commission, granting to intervenor Galaxy Limousine Service, Inc., authority to expand its service as a motor common carrier of passengers. See Henry R. Kesterson, No. MC-129768 (I.C.C. Div. No. 1, Oct. 3, 1980). Finding that the Commission’s decision is not supported by substantial evidence, we reverse.
Before it sought the additional authority granted by the Commission in this proceeding, Galaxy had been authorized to operate a passenger service between designated points in the northeastern United States. On March 20, 1979 Galaxy requested an increase in its authority, so as to include service between all points in Kent and Sussex Counties, Del., on the one hand, and, on the other, Atlantic City, N.J., Baltimore, Md., Newark, N.J., New York, N.Y., Philadelphia, Pa., Washington, D. C., Dulles International Airport, Va., and McGuire Air Force Base, N.J. In support of its application Galaxy submitted twenty-four questionnaires completed by persons residing or working in Kent and Sussex Counties. Each questionnaire contained twenty-two questions. Seven of the questions solicited background information concerning the person completing the questionnaire (Questions Nos. 1-7). Three questions concerned the quality of the existing service provided by Galaxy (Questions Nos. 14-16). The twelve remaining questions solicited data concerning the public demand or need for the authority requested. Of those twelve questions, six called for “yes” or “no” responses (Questions Nos. 8 & 9, 13, 18 & 19, 22). The final six questions were answerable in brief phrases (Questions Nos. 10-12, 17, 20 & 21); only in answering one of these questions would detail have been appropriate (Question No. 20). As might have been expected, all the answers were laconic and lacking in detail. Except for an affidavit given by Henry R. Kesterson, the sole owner of Galaxy, no additional evidence was offered in support of the application. Mr. Kesterson’s affidavit added nothing substantial to the material contained in the questionnaire.
Three common carriers intervened in the proceedings to oppose Galaxy’s application. They were Airport Shuttle, J. G. Exec., Inc., and Lewes Tours, Inc. Each of these carriers had previously been authorized by the Commission to provide passenger services that overlapped in part the extended authority sought by Galaxy. The intervenors submitted evidence in support of their argument that a grant of additional authority to Galaxy would impact adversely on their existing operations in a way that would harm the public interest.
On June 20, 1980 the Commission’s Review Board No. 1 issued a decision granting Galaxy’s application for extended authority. The Review Board explained:
[Galaxy] presents statements from 24 present or potential future supporting users of its service .... In identical format, the statements provide a bare minimum of information as to the requirements of the parties involved. . . .
The evidence establishes a need for the proposed service. Applicant has provided supporting statements which, although somewhat lacking in detail, attest to a need for the proposed expansion of applicant’s operations. Although they are not as precise as we might desire, the supporting statements provide adequate support for the proposed service.
* sf: * sH * *
Henry R. Kesterson, No. MC-129768, slip op. at 1-3 (I.C.C.Rev.Bd. No. 1, June 20, 1980), aff’d (I.C.C. Div. No. 1, Oct. 3, 1980). See also Joint Appendix at 62-64.
Administrative appeals were filed by the three intervening carriers. On October 3, 1980 the Commission’s Division No. 1, sitting as an appellate body, summarily affirmed the Review Board’s decision, concluding that “the findings of Review Board Number 1 are in accordance with the evidence and the applicable law.” Henry R. Kesterson, No. MC-129768 (I.C.C. Div. No. 1, Oct. 3,1980). See also Joint Appendix at 103. Airport Shuttle filed its petition for review by this court.
Under the Interstate Commerce Act as revised by the Act of October 17, 1978, Pub.L.No. 95-473, § 10921, 92 Stat. 1409 (current version at 49 U.S.C. § 10921 (Supp. Ill 1979)), an interstate motor common carrier of passengers cannot operate without a certificate issued by the Commission authorizing the specific service to be provided. The standard to be applied by the Commission in determining whether a certificate should issue is found in section 10922(a) of the Act of October 17, 1978. That section provides:
Except as provided in this section and section 10930(a) of this title, the Interstate Commerce Commission shall issue a certificate to a person authorizing that person to provide transportation subject to the jurisdiction of the Commission . . . as a motor common carrier of passengers ... if the Commission finds that — •
(1) the person is fit, willing, and able—
(A) to provide the transportation to be authorized by the certificate; and
(B) to comply with this subtitle and regulations of the Commission; and
(2) the transportation to be provided under the certificate is or will be required by the present or future public convenience and necessity.
Act of Oct. 17, 1978, Pub.L.No. 95-473, § 10922(a), 92 Stat. 1409, as amended by Act of July 1, 1980, Pub.L.No. 96 — 296, § 5(a)(1), 94 Stat. 794 (current version at 49 U.S.C.A. § 10922(a) (Supp.1981)).
The Commission traditionally has applied a three-part test in evaluating the evidence presented to satisfy the “present or future public convenience and necessity” standard of section 10922(a)(2) and its predecessors. Under this test the Commission must find (1) that the authority applied for will serve a useful public purpose in response to a public demand or need, (2) that the purpose cannot be served as well by existing carriers, and (3) that the purpose can be served by the applicant without impairing the operations of existing carriers in a way that would harm the public interest. See Pan-American Bus Lines Operations, 1 M.C.C. 190, 203 (1936). The federal courts of appeals are in accord in deferring to this interpretation of the “present or future public convenience and necessity” standard. See, e.g., Watkins Motor Lines, Inc. v. ICC, 641 F.2d 1183, 1188-89 (5th Cir. 1981); Midwestern Transportation, Inc. v. ICC, 635 F.2d 771, 776 (10th Cir. 1980); P.A.K. Transport, Inc. v. United States, 613 F.2d 351, 354 (1st Cir. 1980); Argo-Collier Truck Lines Corp. v. United States, 611 F.2d 149, 152 (6th Cir. 1979); Greyhound Lines, Inc. v. United States, 195 U.S.App.D.C. 185, 187, 600 F.2d 999, 1001 (1979) (per curiam); Packer Transportation Co. v. United States, 596 F.2d 891, 895 & n.6 (9th Cir. 1979); Niedert Motor Service, Inc. v. United States, 583 F.2d 954, 959 (7th Cir. 1978); Tri-State Motor Transit Co. v. United States, 570 F.2d 773, 777 (8th Cir. 1978); Senn Trucking Co. v. ICC, 560 F.2d 1179, 1183 (4th Cir. 1977). Judicial review of the Commission’s decisions is limited to a determination of whether findings under the three-part test are supported by substantial evidence and are not arbitrary, capricious, or an abuse of discretion. 5 U.S.C. § 706(2)(A), (E) (1976). See also Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 284, 95 S.Ct. 438, 441, 42 L.Ed.2d 447 (1974). Because we determine that in the present case the Commission’s findings under the first two parts of this test are not supported by substantial evidence, we reverse the agency’s decision.
Substantial evidence can be “something less than the weight of the evidence.” Consolo v. FMC, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966). At a minimum however a decision is not supported by substantial evidence unless there is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938). See also May Trucking Co. v. United States, 193 U.S.App.D.C. 195, 198, 593 F.2d 1349, 1352 (1979).
We have described the evidence relied on by the Commission. It simply cannot be said that the routine, laconic, and untested responses to the twelve standardized questions relating to public demand or need provide “such relevant evidence as a reasonable mind might accept as adequate to support” a finding that the authority applied for will serve a useful public purpose in response to a public demand or need. Furthermore, assuming a public need were shown, this evidence provides no support for finding that the need cannot be served as well by existing carriers. We need not decide what type of evidence is necessary to support a finding of “present or future public convenience and necessity”. We do conclude however that answers to questionnaires which are of limited circulation and which produce skeletal responses, as was the case here, do not provide substantial evidence for such a finding. Accordingly, the Commission’s decision is reversed.
So ordered.
. The federal courts of appeals have exclusive jurisdiction to review decisions of the ICC. See 28 U.S.C. § 2342(5) (1976 & Supp. Ill 1979).
. Galaxy held permanent authority to provide its service between Dover Air Force Base, Del., on the one hand, and, on the other, Baltimore, Md., Newark, N.J., New York, N.Y., Philadelphia, Pa., Washington, D. C., Baltimore-Washington International Airport, Md., Dulles International Airport, Va., McGuire Air Force Base, N.J., and National Airport, Va. Galaxy held temporary authority to provide its service between Seaford, Del., and Baltimore, Md. In operating its service, Galaxy utilized two eleven-passenger vans, one seven-passenger van, one six-passenger van, and three smaller vans. See generally Henry R. Kesterson, No. MC-129768, slip op. at 1 (I.C.C. Rev. Bd. No. 1, June 20, 1980), aff’d (I.C.C. Div. No. 1, Oct. 3, 1980).
. Listed below are the twenty-two questions:
1. Please state your name and address.
2. If you are giving a statement on behalf of your family and on your own behalf, state the names and relationships of the members of your family for whom you make this statement, — a. If you are making this statement on behalf of a company or association, name the company or association. — b. Are you authorized to make this statement on their behalf. — c. By whom.
3. Are you familiar with Bob KestersonGalaxy Limousine Service.
4. Do you know the type of service he now provides.
5. Are you familiar with the proposal of Galaxy Limousine Service to transport passengers and their baggage, transporting not more than eleven (II) passengers in any one vehicle, in special operations, between Kent and Sussex Counties, Del., and Wrightstown, N.J., Newark, N.J., Washington, D. C., Dulles International Airport, Loudoun County, Va., Atlantic City, N.J., Philadelphia, Pa., and New York, N.Y.
6. Have you been advised by Bob Kesterson of the service proposed to be offered between Kent and Sussex Counties, Del. and the points noted above.
7. What type of business do you maintain.
8. Do you or your employees have a need for door-to-door passenger service.
9. Do you arrange for surface transportation from or to Kent/Sussex County.
10. To and from where would you propose to travel and use Galaxy’s service.
11. How often would you take these trips to be offered by Galaxy.
12. How do you presently get to the points mentioned. — a. Is this satisfactory.
13. Would it be an advantage to have the Galaxy Service.
14. Have you used it in the past.
15. How do you find the service.
16. Are you familiar with the equipment and facilities of Galaxy, and, do you find them suitable.
17. What, if any, other comparable bus service is available to you, your family, or business in Kent/Sussex County.
18. Are you familiar with J. G. Exec., Airport Shuttle Service, or Lewes Tours, Inc.— a. Ever use them.
19. Have you found their services satisfactory to meet your needs.
20. If not, why not. Please be specific if you have any complaints with service from other carriers. If there is no such service, please so state.
21. Describe what you must presently do to travel between Kent/Sussex County, Del. and points in the application area.
22. Will you use the service if it is authorized.
See, e.g.. Brief for Petitioner at appendix B.
. J. G. Exec., Inc., filed a motion to intervene in this court. We granted the motion on January 14, 1981. Subsequently, however, J. G. Exec., Inc., moved for leave to withdraw. Leave was granted on April 9, 1981.
. The evidentiary burden on the first two parts of the test is with the applicant. May Trucking Co. v. United States, 193 U.S.App.D.C. 195, 198, 593 F.2d 1349, 1352 (1979). Opponents of the application carry the burden on the final part of the test in that they must show that existing operations will be impaired in a way that would harm the public interest. Id. at 202, 593 F.2d at 1356.
The three-part Pan-American test recently has been revised by the Commission. See 44 Fed.Reg. 60296 (Oct. 19, 1979). In a published policy statement, the Commission announced that the second part of the test, (j.e., that the purpose cannot be served as well by existing carriers), was to be eliminated. Furthermore, the Commission more explicitly defined the evidentiary burdens under the remaining two parts, saying:
In determining applications for motor common carrier authority, we will apply these tests:
(1) The applicant must demonstrate that the operation proposed will serve a useful public purpose responsive to a public demand or need.
(2) The Commission will grant authority commensurate with the demonstrated purpose unless it is established by parties opposing the application that the entry of a new carrier into the field would endanger or impair the operations of existing common carriers to an extent contrary to the public interest. 44 Fed.Reg. 60296, 60299 (Oct. 19, 1979). This policy change was upheld as “a matter within the Commission’s expertise” in Assure Competitive Transportation, Inc. v. United States, 635 F.2d 1301, 1307 (7th Cir. 1980).
The new standard is not to be applied, however, in the case at bar. When originally announced, the Commission established an effective date of November 19, 1979 for applying the new policy. 44 Fed.Reg. 60296 (Oct. 19, 1979). Subsequently the Commission determined that it would apply the new policy only to applications published in the Federal Register after November 30, 1979. See Watkins Motor Lines, Inc. v. ICC, 641 F.2d 1183, 1189 n.10 (5th Cir. 1981); Assure Competitive Transportation, Inc. v. United States, 635 F.2d 1301, 1304 (7th Cir. 1980). The application in this case preceded the effective date, having been published on July 3, 1979. See 44 Fed.Reg. 39064.
. Because we find that Galaxy did not fulfill its burden on the first two parts of the test, we need not pass on whether opponents of the application presented sufficient evidence to support a finding that a grant of the requested authority would impair existing operations in a way that would harm the public interest.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "private business (including criminal enterprises)". What category of business best describes the area of activity of this litigant which is involved in this case?
A. agriculture
B. mining
C. construction
D. manufacturing
E. transportation
F. trade
G. financial institution
H. utilities
I. other
J. unclear
Answer:
|
songer_district
|
H
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify which district in the state the case came from. If the case did not come from a federal district court, answer "not applicable".
UNITED STATES of America and Robert J. Pyle, Special Agent of the Internal Revenue Service, Appellees, v. June MYSLAJEK, Irwin L. Pollack, and I. L. Pollack & Associates, Inc., Appellants.
No. 77-1471.
United States Court of Appeals, Eighth Circuit.
Submitted Sept. 2, 1977.
Decided Dec. 12, 1977.
Carleton D. Powell, Atty., Tax Div., Dept, of Justice, Washington, D. C., for appellees; M. Carr Ferguson, Asst. Atty. Gen., Gilbert E. Andrews and Aaron P. Rosenfeld, Washington, D. C. and Andrew W. Danielson, U. S. Atty., Minneapolis, Minn., on brief.
Jerome Truhn, Minneapolis, Minn., for appellants; Thomas V. Seifert, Minneapolis, Minn., on brief.
Before BRIGHT, ROSS, and HENLEY, Circuit Judges.
PER CURIAM.
Taxpayers Irwin L. Pollack and I. L. Pollack & Associates, Inc., and their accountant, June Myslajek, appeal from a district court order enforcing summonses served upon Ms. Myslajek by the Internal Revenue Service. We affirm.
The district court found the following facts:
The respondent is an accountant in possession of certain financial records relating to the tax liabilities of the intervenors, Irwin L. Pollack (Pollack) and I. L. Pollack & Associates, Inc. (Associates).
On April 17, 1975, Mark Cohen, an IRS revenue agent, began an audit of Associates’ 1973 tax return. Cohen later expanded his audit to include the tax years 1972 through 1975. He also began an audit of Pollack individually. During his audits agent Cohen had access to at least some of the financial records relating to the tax liabilities of Pollack and of Associates which were in the respondent’s possession. Agent Cohen made a preliminary determination that additional taxes were due from both Pollack and from Associates and that there were certain “badges of fraud” which had become apparent. Agent Cohen concluded his audit without making any final determinations as to the amount of additional tax owed, and on July 7, 1976, he filed a fraud referral report. [440 F.Supp. at 6.]
After examining the records at Ms. Myslajek’s office, Agent Cohen took a number of the documents into his possession for further review. On March 19, 1976, he returned the documents to Ms. Myslajek so that she could comply with a subpoena in a divorce proceeding in which Mr. Pollack was a party. On April 15, 1976, Agent Cohen again took possession of the records. A second subpoena in the divorce matter required him to return the documents again on June 24, 1976. On August 24, 1976, the Internal Revenue Service served two summonses on Ms. Myslajek’s son ordering her to produce the documents. Her refusal to do so led to this enforcement action.
Ms. Myslajek, along with the taxpayers as intervenors in this action, raises several issues on appeal. Only two of these issues require discussion. As to the others, we find no error in the district court’s opinion.
Ms. Myslajek claims that the summonses were improperly served. Section 7603 of the Internal Revenue Code requires that a summons either be served on the person to whom it is directed or be left at her “last and usual place of abode.” The testimony in the enforcement proceeding established that Robert Pyle, a special agent of the IRS, served these two summonses upon Ms. Myslajek’s adult son at her business office and spoke to Ms. Myslajek over the telephone. He advised her that the IRS required certain of the taxpayers’ records, and she informed him that some of the records were at her office and others were in the trunk of her car. Ms. Myslajek appeared on September 8, 1976, in response to the summonses, but declined to testify or produce any documents. Instead, she presented a statement listing her objections to the summonses. She did not at that time object to the defective service. The defect in service first surfaced almost three months after the delivery of the summonses when Ms. Myslajek, in her answer to the enforcement petition, moved to quash the summonses on grounds of insufficient service.
The district court rejected the motion to quash the summonses, stating that “to deny enforcement * * * would be exalting form over substance.” The court deemed service at respondent’s business office to be equivalent to service at Ms. Myslajek’s “last and usual place of abode.”
We agree with the result reached by the district court but not with its analysis. The record demonstrates that Ms. Myslajek received actual notice of the summonses on the day they were served but did not object to the defective service until almost three months later. Although she filed a statement objecting to the summonses on substantive grounds, she did not take that opportunity to raise any procedural issue. Had she voiced her objections at an earlier date, any defect in service could easily and inexpensively have been cured through a second service. Under the special circumstances of this case, we hold that Ms. Myslajek waived strict compliance with the requirements of section 7603. See United States v. Gajewski, 419 F.2d 1088 (8th Cir. 1969), cert. denied, 397 U.S. 1040, 90 S.Ct. 1361, 25 L.Ed.2d 651 (1970).
Ms. Myslajek further claims that the IRS failed to comply with the requirements of section 7605(b) of the Internal Revenue Code for a second inspection of taxpayer’s records. The district court rejected this argument with the following analysis:
It is undisputed that neither Pollack nor Associates was given any notice that a second inspection was necessary. The respondent claims that any further examination of the financial records would constitute a second inspection. The [government] claim[s] that the IRS investigation is a continuing one and that no second inspection notice was required. Although the matter is not free from difficulty, the court concludes that the IRS’s investigation of the tax liabilities of Pollack and of Associates is a continuing one. When an investigation has not been completed, an examination of a taxpayer’s books and records is not a second inspection even though the agents may have seen specific documents on a previous occasion. United States v. Giordano, 419 F.2d 564 (8th Cir. 1969). [440 F.Supp. at 7.]
The question whether these summonses signaled the beginning of a second inspection or merely a continuation of the earlier one raises an issue of fact. Both parties agree that Agent Cohen returned the records in question to Ms. Myslajek because of the divorce proceeding. Agent Cohen testified that the records were returned because
there was a divorce proceeding between Mr. Pollack and his wife, and that attorney had given June Myslajek a summons and * * * I was told on that date that the * * * records had to be back to her that afternoon * * *.
Ms. Myslajek’s testimony was as follows:
Q. And after that then Mr. Cohen received all of those documents back?
A. I think they were all of them * * but he did get them back from me again.
Then they wanted them again for this trial, Mr. Pollack was going to finally get his divorce * * *.
Thus, the return of the records in itself does not indicate an end to the earlier inspection. Ms. Myslajek claims, however, that Agent Cohen, upon returning the documents, told her he was through with them:
Q. And did he say anything when he brought those back?
A. Yes, he said — I said I would get them back to him and he said he was through with them * * *.
Agent Cohen’s testimony differs:
Q. Did there come a point upon your investigation * * * when you told Ms. Myslajek that you were done with the records?
A. That I was done with the records?
Q. That you were done with the records.
A. No.
******
Q. So that at no time when you returned any of the documents you told her — you did not tell her you were done with them, right?
A. Right.
We construe the district judge’s conclusion that the investigation was “a continuing one” to mean that he accepted the testimony of Agent Cohen over the conflicting testimony of Ms. Myslajek.
The district court is in a better position than we are to judge the credibility of witnesses, and appellants have offered us no appropriate legal basis for overturning his findings of fact. Those findings render section 7605(b) inapplicable.
Thus we affirm.
. The Honorable Donald D. Alsop, United States District Judge for the District of Minnesota. The district court opinion is published at 440 F.Supp. 5 (D.Minn.1977).
. Her objections were as follows:
1. Evidence is being sought solely to make a criminal case against the taxpayer.
2. The information sought by the summons is already within the possession of the Commissioner of Internal Revenue.
3. The summons has been issued to harass the taxpayer and is an abuse of the court’s process.
. I.R.C. § 7605(b) provides:
(b) Restrictions on examination of taxpayer. — No taxpayer shall be subjected to unnecessary examination or investigations, and only one inspection of a taxpayer’s books of account shall be made for each taxable year unless the taxpayer requests otherwise or unless the Secretary or his delegate, after investigation, notifies the taxpayer in writing that an additional inspection is necessary.
Question: From which district in the state was this case appealed?
A. Not applicable
B. Eastern
C. Western
D. Central
E. Middle
F. Southern
G. Northern
H. Whole state is one judicial district
I. Not ascertained
Answer:
|
songer_casetyp1_7-3-3
|
I
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation - commercial disputes".
UNITED STATES of America, for the Use and Benefit of CARTER EQUIPMENT COMPANY, INC., Plaintiff-Appellee, v. H. R. MORGAN, INC. and National Indemnity Company, Defendants-Appellants.
No. 75-2362.
United States Court of Appeals, Fifth Circuit.
June 16, 1977.
Thomas W. Tyner, Hattiesburg, Miss., for H. R. Morgan & Nat’l Indemnity.
Francis T. Zachary, Hattiesburg, Miss., for H. R.. Morgan.
Wm. H. Cox, Jr., Jackson, Miss., D. Gary Sutherland, Hattiesburg, Miss., for plaintiff-appellee.
ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC
(Opinion January 10, 1977, 5 Cir., 1977, 544 F.2d 1271).
Before COLEMAN, GODBOLD and HILL, Circuit Judges.
PER CURIAM:
The Petition for Rehearing is GRANTED. No member of this panel nor Judge in regular active service on the Court having requested that the Court be polled on rehearing en banc (Rule 35 Federal Rules of Appellate Procedure; Local Fifth Circuit Rule 12) the Petition for Rehearing En Banc is DENIED. The appellee, Carter Equipment Co., Inc. (Carter), suggests in its petition for rehearing that our decision disallowing the recovery of attorney’s fees in this Miller Act suit was erroneous. We agree and the following is to be substituted for the last paragraph of our prior opinion:
Finally, appellants insist that the district court erred in awarding attorney’s fees to Carter. The issue is whether a contractual provision for attorney’s fees between a subcontractor and its supplier is enforceable against the general contractor and its surety under the Miller Act. Carter asserts that since the equipment rentals provided for the recovery of attorney’s fees, this award is recoverable under the general terms of the payment bond, interpreted with a view toward the liberal purpose of the Miller Act.
The relevant statutory language provides that “[ejvery person who has furnished labor or material in the prosecution of the work provided for in such contract . who has not been paid in full therefor . shall have the right to sue on such payment bond . . . for the sum or sums justly due him”. 40 U.S.C.A. § 270b(a). It is important to note that the statute does not differentiate between the scope of coverage for the liabilities of subcontractors as opposed to the scope of coverage for the liabilities of general contractors. While the statute does impose some additional notice requirements on persons having no direct contractual relationship with the general contractor, insofar as financial coverage of the bond is concerned, a supplier of the subcontractor is equally as entitled to be “paid in full” for “the sums justly due him.”
The Supreme Court allowed the recovery of attorney’s fees in United States ex rel. Sherman v. Garter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957). A provision for the award of attorney’s fees was contained in a contract between the general contractor and the trustees of an employees’ welfare fund. The Supreme Court held that the attorney’s fees were “sums justly due” under the Miller Act. Since there appears to be no statutory basis for distinguishing between the recovery allowed to the supplier of a subcontractor and that of a person dealing directly with the general contractor, we conclude that attorney’s fees are a recoverable item under this Miller Act bond. At least two other circuits have reached this same conclusion. Travelers Indemnity Co. v. United States ex rel. Western Steel Co., 362 F.2d 896 (9th Cir. 1966); D & L Construction Co. v. Triangle Electric Supply Co., Inc., 332 F.2d 1009 (8th Cir. 1964).
There is some authority in this circuit which would support a contrary conclusion. The court in United States ex rel. Mississippi Road Supply Co. v. Morgan, 542 F.2d 262 (5th Cir. 1976), posited that “[e]ven under the more liberal rules of construction applicable in Miller Act eases, precedent indicates that the terms of this bond would not support an award of attorney’s fees.” Id. at 269. However, the Mississippi Road Supply court was concerned with a hybrid bond that was neither fish nor fowl. The court merely recited this circuit’s position with regard to Miller Act bonds as reflected in Transamerica Insurance Co. v. Red Top Metal Inc., 384 F.2d 752 (5th Cir. 1967). The Supreme Court subsequent to Red Top Metal disapproved of our practice of looking to state law for resolution of the attorney’s fee issue. F. D. Rich Co., Inc. v. United States ex rel. Industrial Lumber Co., Inc., 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974). Of course, we are bound to apply the decision in F. D. Rich to the instant suit and upon application of purely federal law we conclude that the contractual provision for attorney’s fees in this case is enforceable under the Miller Act bond.
REVERSED and REMANDED.
. ATTORNEY’S FEES. Should it become necessary that Lessor employ an attorney to enforce any of the provosions (sic) of this Agreement, to take possession of the equipment covered hereby or any part thereof, or to recover any sum of money due hereunder, Lessor shall be entitled to recover such reasonable attorney’s fees and expenses as shall be incurred in connection therewith.
. The language relied upon provides:
“NOW THEREFORE, if the Principal shall promptly make payment to all persons supplying labor and material in the prosecution of the work provided for in said contract, . .
Question: What is the specific issue in the case within the general category of "economic activity and regulation - commercial disputes"?
A. contract disputes-general (private parties) (includes breach of contract, disputes over meaning of contracts, suits for specific performance, disputes over whether contract fulfilled, claims that money owed on contract) (Note: this category is not used when the dispute fits one of the more specific categories below)
B. disputes over government contracts
C. insurance disputes
D. debt collection, disputes over loans
E. consumer disputes with retail business or providers of services
F. breach of fiduciary duty; disputes over franchise agreements
G. contract disputes - was there a contract, was it a valid contract ?
H. commerce clause challenges to state or local government action
I. other contract disputes- (includes misrepresentation or deception in contract, disputes among contractors or contractors and subcontractors, indemnification claims)
J. private economic disputes (other than contract disputes)
Answer:
|
songer_civproc1
|
0
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited federal rule of civil procedure in the headnotes to this case. Answer "0" if no federal rules of civil procedure are cited. For ties, code the first rule cited.
Carroll Lee SMITH, Appellant, v. UNITED STATES of America, Appellee.
No. 9981.
United States Court of Appeals Tenth Circuit.
May 20, 1969.
Certiorari Denied Nov. 17, 1969.
See 90 S.Ct. 273.
Clayton W. Bell, Boulder, Colo., for appellant.
John W. Raley, Jr., Asst. U. S. Atty. (B. Andrew Potter, U. S. Atty., was with him on the brief), for appellee.
Before WARREN L. JONES, BREITENSTEIN, and HOLLOWAY, Circuit Judges.
Of the Fifth Circuit, sitting by designation.
BREITENSTEIN, Circuit Judge.
This is an appeal from the denial, without an evidentiary hearing, of appellant’s application for relief under 28 U.S.C. § 2255. A two-count indictment charged appellant with assault on an agent of the Federal Bureau of Investigation in violation of 18 U.S.C. § 111 and with destruction of government property valued at more than $100 in violation of 18 U.S.C. § 1361. A jury found him guilty on each count, and on March 17, 1966, he was sentenced to three-year concurrent terms.
The first claim is that the court improperly denied a motion for continuance of the trial. At his arraignment on January 14, 1966, appellant appeared with retained counsel and pleaded not guilty. The court announced that the trial would be held during the next jury term and no objection was made thereto. On February 28, appellant appeared in court and said that he was discharging his counsel and would obtain new counsel. The court told him that he should get new counsel immediately because the case was going to trial. On March 1, the court set the case for trial on March 9 and instructed the United States Attorney to advise the lawyer whom appellant had indicated he would employ. On March 9, the appellant appeared in court without a lawyer and asked that counsel be appointed. The court said that in anticipation of such a request he had asked attorney Mills to discuss the case with appellant and to be in court. Mills said that he had discussed the case with appellant and would undertake the appointment. When the case came on for trial on March 14, Mills announced that the defense was ready and then filed a motion for continuance on the ground of inadequate time to prepare and inability to secure a witness. The showing was insufficient under our decision in Leino v. United States, 10 Cir., 338 F.2d 154, 156. The trial court did not abuse its discretion in denying the continuance. See Smith v. United States, 10 Cir., 273 F.2d 462, 466, cert. denied 363 U.S. 846, 80 S.Ct. 1619, 4 L.Ed.2d 1729, and Brooks v. United States, 10 Cir., 330 F. 2d 757, 758, cert. denied 379 U.S. 852, 85 S.Ct. 100, 13 L.Ed.2d 56.
Appellant says that he was denied a direct appeal from his conviction. He was sentenced on March 17, 1966, with the sentence to begin at the expiration of a state sentence. Two days later he was turned over to the state authorities as an escapee. He was kept in solitary confinement for six months. On October 2, 1967, over a year later, he filed a “Motion for Appeal” wherein he alleges that on the day of sentence he gave an oral notice of appeal. The transcript of the sentencing proceedings shows no such oral notice. No claim is made of lack of knowledge of right to appeal. No showing is made to satisfy the “plain error test” which justifies consideration of a notice of appeal which is filed out of time. See Fennell v. United States, 10 Cir., 339 F.2d 920, 923, cert. denied 382 U.S. 852, 86 S.Ct. 100, 15 L.Ed.2d 90. The claimed error is the denial of the continuance and we hold that there was no abuse of discretion in that regard.
The appellant made two requests for a free trial transcript. One was made five months before the § 2255 motion was filed and the other more than four weeks after the motion was denied. When the case came to this court, we ordered and received copies of the portions of the transcript which we deemed pertinent. In the circumstances, the denial of the transcripts was not error. See Prince v. United States, 10 Cir., 312 F. 2d 252, 253.
Appellant filed a motion under Rule 35, F.R.Crim.P., asking that he be given credit for time spent in pre-sentence confinement. It was denied and no appeal was taken. On this appeal from the denial of the § 2255 motion the point is raised, but it was not raised in the § 2255 proceedings before the district court. Accordingly, the point is not properly before us for review. Tyler v. United States, 10 Cir., 361 F.2d 862, 864. In any event, the point is of no avail. Sentence was passed before the 1966 amendment to 18 U.S.C. § 3568. The pertinent statutes do not provide for a mandatory minimum sentence. The court imposed identical concurrent terms which were well within the statutory máximums. The denial by the trial court of credit for pre-sentence confinement was within its power.
Affirmed.
Question: What is the most frequently cited federal rule of civil procedure in the headnotes to this case? Answer with a number.
Answer:
|
songer_r_fiduc
|
8
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "fiduciaries". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
CUTAIAR, Richard, Lemon, William, Dagen, Vincent, Schurr, Maurice, and Gormley, William, as Trustees of the Teamsters Health and Welfare Fund of Philadelphia and Vicinity and as Trustees of the Teamsters Pension Trust Fund of Philadelphia and Vicinity and Schaffer, Jr., Charles J., Administrator of the Teamsters Health and Welfare Fund of Philadelphia and Vicinity and as Administrator of the Teamsters Pension Trust Fund of Philadelphia and Vicinity and Teamsters Pension Trust Fund of Philadelphia and Vicinity and Teamsters Health and Welfare Fund of Philadelphia and Vicinity v. MARSHALL, F. Ray, Secretary of Labor, Appellant.
No. 78-1380.
United States Court of Appeals, Third Circuit.
Argued Nov. 17, 1978.
Decided Jan. 12, 1979.
Carin Ann Clauss, Sol. of Labor, Monica Gallagher, Associate Sol., Plan Benefits Security Div., Norman P. Goldberg, Counsel for Litigation, Judith Burghardt, Atty., U. S. Dept. of Labor, Washington, D. C., for the Secretary of Labor, appellant.
James J. Leyden, James D. Crawford, Nicholas N. Price, Edward Davis, James McG. Mallie, Philadelphia, Pa., for appellees; Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., of counsel.
Before ALDISERT and HUNTER, Circuit Judges, and GERRY, District Judge.
Honorable John F. Gerry, of the United States District Court for the District of New Jersey, sitting by designation.
OPINION OF THE COURT
ALDISERT, Circuit Judge.
The Secretary of Labor, responsible for enforcement of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., issued an opinion letter stating that certain transactions by the trustees of two union employee benefit plans were in violation of the Act. The trustees sought, and the district court granted, a declaratory judgment that the Secretary’s letter was “null and void.” This appeal requires us to decide whether the trustees’ complaint presented a justiciable controversy, and, if so, whether there was a violation of ERISA. Because we find no jurisdictional defect, and because the trustees violated the Act, we reverse.
I.
In 1951, the Teamsters Health and Welfare Fund of Philadelphia and Vicinity (welfare fund) was created to provide medical, hospital, disability, life insurance and other welfare benefits to members of a number of Teamster local unions in Eastern Pennsylvania. In 1957, the Teamsters Pension Trust Fund of Philadelphia and Vicinity (pension fund) was created to provide retirement income to members of the same union locals. Both employee benefit plans were established and administered pursuant to the terms of the Labor Management Relations Act of 1947, 29 U.S.C. § 141 et seq. (Taft-Hartley Act). The obvious parallelism of the plans and the large overlap in the identity of participants, union locals and employers who were parties to the plans made it feasible to administer them jointly. Each of the multi-employer plans had an administrator and a board composed of three union-designated trustees and three employer-designated trustees; these seven individuals were the same for both plans.
In 1974, due to decreased employer contributions, rising medical costs and increased utilization, the welfare fund developed a serious cash flow problem. By mid-1975, it became clear that the fund would have to borrow $4 million to pay currently accumulated benefit claims, and the trustees voted unanimously to do so on the recommendation of the administrator. By contrast to the welfare fund, the pension fund had ample liquid assets. It appeared possible to benefit both funds by transferring the money from one to the other; the pension fund, as lender, might receive»a higher rate of interest than was commercially available while the welfare fund, as borrower, might pay less interest than would be required commercially. On a motion, to lend the $4 million to the welfare fund, the pension fund trustees deadlocked, three of them expressing concern as to their fiduciary responsibility in authorizing the transactions, and the issue was referred to an impartial umpire under § 302(c)(5) of the Taft-Hartley Act, 29 U.S.C. § 186(c)(5). The umpire was asked to decide the legality of the loan under ERISA.
The umpire issued an award holding that the trustees’ deadlock presented an arbitrable dispute under § 302(c)(5), that ERISA did “not countermand or modify the impact” of the Taft-Hartley Act in this respect, and that nothing in ERISA prohibited the pension fund from making the disputed loan to the welfare fund. Although the umpire did not direct the trustees to enter into the proposed transaction, the decision satisfied the concerns of the trustees and the loan was consummated.
A subsequent investigation by the Department of Labor led to the conclusion that the loan violated ERISA § 406(b)(2), 29 U.S.C. § 1106(b)(2):
(b) A fiduciary with respect to a plan shall not—
(2) in his individual or in any other capacity act in any transaction involving the plan on behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries. .
On August 3, 1977, the Deputy Administrator for Pension and Welfare Benefit Programs, United States Department of Labor, wrote to the trustees to inform them of the violation. Among other things, the letter stated that
while you were fiduciaries with respect to the Pension Trust, you acted in a “transaction involving the plan on behalf of a party (the Welfare Trust) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries.” . . . Also, you should be aware that if the Pension Trust suffers any losses because of this transaction, you may be held personally liable therefor under § 409. For your future guidance, please be advised that we are of the view that any sale or loan between the two plans as presently administered is violative of § 406, and exemptions under § 408 of the ERISA should be sought with regard thereto.
Appendix at 62-63. The issuance of this letter allegedly made it difficult for the trustees to obtain fiduciary liability insurance. They filed suit in federal district court seeking a declaratory judgment that the letter was null and void because the Secretary exceeded his authority under ER-ISA and erroneously determined that the trustees violated the Act.
The Secretary has appealed from the order of the district court which granted the requested relief. We are asked to examine various provisions of the Taft-Hartley Act and the interaction of the subsequently enacted ERISA provisions relating to the administration of employee benefit plans. Preliminarily, however, we must address a challenge to the jurisdiction of the court based on the assertion that the trustees’ complaint did not present a justiciable controversy under Article III of the Constitution.
II.
The Secretary’s jurisdictional challenge is predicated on the notion that the trustees “hinged their suit for declaratory relief on the allegation that the Secretary’s letter of August 3,1977 had created a ‘serious doubt’ that the plaintiff Trustees would be able to secure fiduciary insurance.” Brief for Appellant at 18. Appellant asserts that without the alleged adverse impact on their ability to obtain insurance, the trustees would lack standing to litigate the Secretary’s interpretation of ERISA, and that the Secretary’s decision not to impose sanctions for the violation precludes a finding of justiciability. Id. at 18-19. Appellant alleges that proof of adverse impact on the trustees fell far short of the allegations in the complaint.
The trustees, on the other hand, argue that the district court’s factual finding that the Secretary’s letter had a “negative effect” on their ability to obtain insurance was not clearly erroneous, that the effect was sufficient to establish the immediacy, reality and adversity of an “actual controversy.” Appellees also argue their standing “to challenge the Secretary’s ruling wholly irrespective of the effect that the . letter may have had on their ability to obtain new insurance,” Brief for Appellees at 10, because their complaint sought judicial review of final agency action pursuant to §§ 502(k) and 507(a) of ERISA, 29 U.S.C. §§ 1132(k) and 1137(a). This raises the fundamental inconsistency of appellant’s position: the Secretary asserts his authority to investigate employee benefit plans and to interpret and enforce the provisions of ERISA, yet his final action in declaring a statutory violation pursuant to that authority is not subject to judicial review because it is so meaningless as to fail to create an actual controversy.
A.
The trustees’ complaint alleged jurisdiction under 29 U.S.C. § 1132(k), which provides as follows:
Suits by an administrator, fiduciary, participant, or beneficiary of an employee benefit plan to review a final order of the Secretary, to restrain the Secretary from taking any action contrary to the provisions of this Act, or to compel him to take action required under this subchapter, may be brought in the district court . .,
and under 5 U.S.C. § 704, made applicable by 29 U.S.C. § 1137(a). Title 5 U.S.C. § 704 provides:
Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.
Although jurisdiction was invoked under ERISA and the Administrative Procedure Act, the trustees sought only declaratory relief. Title 28 U.S.C. § 2201 allows a federal court to grant a declaratory judgment in “a case of actual controversy.” The statute creates a remedy only; it does not create a basis of jurisdiction, and does not authorize the rendering of advisory opinions. Thus the Supreme Court has held that there must be a “live dispute” between the parties, Powell v. McCormack, 395 U.S. 486, 517-18, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969), and that there must be a “substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Zwickler v. Koota, 389 U.S. 241, 244 n. 3, 88 S.Ct. 391, 393, 19 L.Ed.2d 444 (1967). The Court has also held that the Declaratory Judgment Act requirement of an “actual controversy” is identical to the constitutional requirement of “cases” and “controversies.” Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 239-40, 57 S.Ct. 461, 81 L.Ed. 617 (1937).
B.
We think jurisdiction was properly exercised under 29 U.S.C. § 1132(k) and 5 U.S.C. § 704. Appellant has stipulated that the contested letter “was final and that there was no administrative appeal procedure.” Appendix at 101. Unless the issuance of the letter was a nullity, or unless the Secretary was without statutory authority to investigate the trustees’ action and to determine its legality under ERISA, then we fail to understand how the Secretary can challenge the court’s jurisdiction to review the agency’s action pursuant to 5 U.S.C. § 704.
Furthermore, the trustees established by affidavit that a carrier of fiduciary liability insurance rejected the trustees’ application “because of the Department of Labor’s finding, set forth in a letter dated August 3,1977, that the trustees of the Trusts have engaged in a prohibited transaction and the possibility of a future suit or suits which Aetna would have to defend.” Appendix at 92. Based on that evidence, the court found as a fact that the letter had a “negative effect” on the trustees’ ability to obtain insurance, id. at 302. We do not consider that finding to be clearly erroneous, and we think that such a negative effect creates sufficient immediacy and adversity to present the court with an “actual controversy.”
We find readily distinguishable the cases presented by appellant to attack the justiciability of this controversy and the trustees’ standing to challenge the Secretary’s interpretation of ERISA. The cases relied on concern the circumstances under which a party may challenge governmental action of general applicability, rather than action aimed specifically at the party making the challenge. None of the cases cited by appellant involved a situation comparable to what exists here — a final ruling by an administrative agency declaring unlawful specific conduct by specific individuals, and an attempt by those individuals to obtain judicial relief to clear their names.
The Secretary’s enforcement responsibilities with respect to ERISA, the exhaustion of agency re.view, and the direct impact of the Secretary’s action on the trustees were sufficient to establish justiciability and to vest jurisdiction in the district court to grant or deny declaratory relief.
III.
Our review of the merits raises questions of the interaction of various provisions of the Taft-Hartley Act and ERISA. Simply put, the trustees urge that no violation of ERISA occurred because the two funds were not adverse within the meaning of the Act, and that even if a violation occurred, good faith reliance on the umpire’s award is a valid defense. The Secretary’s conclusion that a violation did occur was based on his interpretation that § 406(b)(2) creates a per se proscription of the type of transaction in question, and that a Taft-Hartley umpire cannot possibly adjudicate the legality of a transaction under ERISA. The Secretary’s position is that a borrower and a lender in the same transaction are always “adverse” within the meaning of § 406(b)(2). Brief for Appellant at 27.
A.-
It is important to understand that this case involves no taint of scandal, no hint of self-dealing, no trace of bad faith. The violation was concededly a technical one, the result • of a misunderstanding of the requirements of the newly enacted ERISA bolstered by the result of good faith submission of the dispute to impartial arbitration. Uncontradicted testimony before the district court established that the terms of the transaction were fair and reasonable with respect to both plans.
The pension and welfare plans, from their inception, had been subject to the rigid structural requirements of the Taft-Hartley Act. A central section of the Act, § 302(c)(5), 29 U.S.C. § 186(c)(5), requires that employee benefit plans to which employers contribute must have an equal number of employer and employee representatives, and if the two groups cannot agree on the administration of the fund, they must choose an impartial umpire to decide the dispute. It was under this provision that the trustees of the pension plan submitted the propriety of the loan transaction to the umpire. The umpire, as we have noted, decided that the proposed loan would not violate the Taft-Hartley Act or ERISA.
The Department of Labor, exercising its investigatory and enforcement responsibilities under ERISA, examined the loan and determined that the pension trustees acted on behalf of a party, the welfare plan, whose interests were adverse to interests of the pension plan, thus violating § 406(b)(2). The Secretary’s reasoning relies on the fact that the participants and beneficiaries in the two plans are not co-extensive, though it is undisputed that a great many employees participate in both plans and that most participants in the welfare plan are future participants in the pension plan and thus have a strong interest in the strength of the fund. Also critical to the Secretary’s conclusion is the conception that a borrower and a lender in the same transaction always have interests which are legally opposed.
B.
With this framework, the issues are resolved by a simple exercise in statutory construction. Does § 406(b)(2) prohibit transactions “adverse” in the technical sense asserted by the Secretary, or must a transaction exhibit fiduciary misconduct, reflecting harm to the beneficiaries, before the statute is violated? We endorse without reservation the interpretation of the Secretary. When identical trustees of two employee benefit plans whose participants and beneficiaries are not identical effect a loan between the plans without a § 408 exemption, a per se violation' of ERISA exists.
ERISA went into effect on September 2, 1974. To ascertain legislative concerns and policies, it is not necessary to delve deeply into committee hearings and reports. In the first section of the Act, Congress stated its findings and policy:
(a) The Congress finds that the growth in size, scope, and numbers of employee benefit plans in recent years has been rapid and substantial; . . . that the continued well-being and security of millions of employees and their dependents are directly affected by these plans; that they are affected with a national public interest; . . . that owing to the inadequacy of current minimum standards, the soundness and stability of plans with respect to adequate funds to pay promised benefits may be endangered; that owing to the termination of plans before requisite funds have been accumulated, employees and their beneficiaries have been deprived of anticipated benefits; and that it is therefore desirable in the interests of employees and their beneficiaries, for the protection of the revenue of the United States, and to provide for the free flow of commerce, that minimum standards be provided assuring the equitable character of such plans and their financial soundness.
(b) It is hereby declared to be the policy of this Act to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.
29 U.S.C. § 1001.’ We note the national public interest in safeguarding anticipated employee benefits by establishing minimum standards to protect employee benefit plans. The substantial growth of plans affecting the security of millions of employees and their dependents, as well as the limited resources of the Department of Labor in the enforcement of ERISA, leads us to believe that Congress intended to create an easily applied per se prohibition of the type of transaction in question.
We do not regard this as a harsh rule. Section 408(a), 29 U.S.C. § 1108(a), allows the Secretary to grant exemptions to fiduciaries from the restrictions of § 406. Section 408(a) requires publication in the Federal Register and explicitly provides:
The Secretary may not grant an exemption under this subsection unless he finds that such exemption is—
(1) administratively feasible,
(2) in the interests of the plan and of its participants and beneficiaries, and
(3) protective of the rights of participants and beneficiaries of such plan.
The Secretary may not grant an exemption . . from section 1106(b) of this title unless he affords an opportunity for a hearing and makes a determination on the record with respect to the findings required by paragraphs (1), (2), and (3) of this subsection.
That such extensive publication and hearing procedures were established by Congress before exemption may be authorized indicates an intent to create, in § 406(b), a blanket prohibition of certain transactions, no matter how fair, unless the statutory exemption procedures are followed.
We have no doubt that the pension fund’s loan to the welfare fund falls within the prohibition of § 406(b)(2). Fiduciaries acting on both sides of a loan transaction cannot negotiate the best terms for either plan. By balancing the interests of each plan, they may be able to construct terms which are fair and equitable for both plans; if so, they may qualify for a § 408 exemption. But without the formal procedures required under § 408, each plan deserves more than a balancing of interests. Each plan must be represented by trustees who are free to exert the maximum economic power manifested by their fund whenever they are negotiating a commercial transaction. Section 406(b)(2) speaks of “the interests of the plan or the interests of its participants or beneficiaries.” It does not speak of “some” or “many” or “most” of the participants. If there is a single member who participates in only one of the plans, his plan must be administered without regard for the interests of any other plan.
C.
The conflict between the Taft-Hartley Act and ERISA is more apparent than real. Although the former Act established certain structural and procedural requirements for employee benefit plans in 1947, ERISA created numerous higher standards for the administration of such plans. The new standards are incontestably applicable to plans formerly governed only by the TaftHartley Act.
It is commonplace that new statutes create new requirements and prohibitions where none existed before. It is axiomatic that provisions in different statutes should, if possible, be interpreted so as to effectuate both provisions. The Taft-Hartley umpire provision was created to break deadlocks between employer and employee groups “[on] the administration of such fund,” not to insulate trustees from the effects of their illegal acts. Surely if the employer and employee trustees deadlocked over a motion to embezzle the fund, submission of the dispute to an umpire would have no legal effect. Section 302(c)(5) of the Taft-Hartley Act contemplates the resolution of deadlocks over two permissible administrative courses of action. Because the transaction in question was prohibited by statute in 1974, a Taft-Hartley umpire had no power to approve it in 1975.
The umpire’s award is not before us. That the Secretary’s action is inconsistent with the award is beyond the scope of our review. We simply approve the action of the Secretary and endorse his interpretation of § 406(b)(2) of ERISA.
D.
We need not address the contention of the trustees that their good faith, as evidenced by their submission of their dispute to an umpire, should constitute a defense in an action against them as individuals for engaging in a prohibited transaction to the detriment of the fund. The record reflects that this transaction did not harm the fund. The Secretary contemplates no action against the trustees. Appendix at 62. Therefore, no issue relating to the liability of the trustees is before us for review.
IV.
We hold that the final action of the Secretary in issuing a letter specifying a violation of ERISA by the trustees of an employee benefit plan is reviewable under the Administrative Procedure Act and presents a case or controversy under the Constitution. We endorse the Secretary’s interpretation of § 406(b)(2) and hold that it creates a per se prohibition of a transfer between two funds where the trustees are identical but the participants and beneficiaries are not.
The district court’s order declaring the Secretary’s letter to be null and void will be reversed and the proceedings remanded with a direction to enter judgment in favor of the Secretary of Labor.
. 29 U.S.C. § 186(c)(5) provides:
(c) The [restrictions] of this section shall not be applicable ... (5) with respect to money or other thing of value paid to a trust fund established by such representative, for the sole and exclusive benefit of the employees of such employer, and their families and dependents (or of such employees, families, and dependents jointly with the employees of other employers making similar payments, and their families and dependents): Provided, That (A) such payments are held in trust for the purpose of paying, either from principal or income or both, for the benefit of employees, their families and dependents, for medical or hospital care, pensions on retirement or death of employees, compensation for injuries or illness resulting from occupational activity or insurance to provide any of the foregoing, or unemployment benefits or life insurance, disability and sickness insurance, or accident insurance; (B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer, and employees and employers are equally represented in the administration of such fund, together with such neutral persons as the representatives of the employers and the representatives of employees may agree upon and in the event the employer and employee groups deadlock on the administration of such fund and there are no neutral persons empowered to break such deadlock, such agreement provides that the two groups shall agree on an impartial umpire to decide such dispute, or in event of their failure to agree within a reasonable length of time, an impartial umpire to decide such dispute shall, on petition of either group, be appointed by the district court of the United States for the district where the trust fund has its principal office, and shall also contain provisions for an annual audit of the trust fund, a statement of the results of which shall be available for inspection by interested persons at the principal office of the trust fund and at such other places as may be designated in such written agreement; and (C) such payments as are intended to be used for the purpose of providing pensions or annuities for employees are made to a separate trust which provides that the funds held therein cannot be used for any purpose other than paying such pensions or annuities; . .
Question: What is the total number of respondents in the case that fall into the category "fiduciaries"? Answer with a number.
Answer:
|
sc_casedisposition
|
B
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the disposition of the case, that is, the treatment the Supreme Court accorded the court whose decision it reviewed. The information relevant to this variable may be found near the end of the summary that begins on the title page of each case, or preferably at the very end of the opinion of the Court. For cases in which the Court granted a motion to dismiss, consider "petition denied or appeal dismissed". There is "no disposition" if the Court denied a motion to dismiss.
WHITFIELD v. UNITED STATES
No. 03-1293.
Argued November 30, 2004
Decided January 11, 2005
O’Connor, J., delivered the opinion for a unanimous Court.
Sharon C. Samek, by appointment of the Court, post, p. 985, argued the cause for petitioners in both cases. With her on the briefs were Thomas C. Goldstein, Amy Howe, Pamela S. Karlan, and Richard Ware Levitt.
Jonathan L. Marcus argued the cause for the United States in both cases. With him on the brief were Acting Solicitor General Clement, Assistant Attorney General Wray, Deputy Solicitor General Dreeben, and Kirby A. Heller.
Together with No. 03-1294, Hall v. United States, also on certiorari to the same court.
Richard A. Greenberg and Joshua L. Dratel filed a brief for the National Association of Criminal Defense Lawyers as amicus curiae urging reversal in both cases.
Justice O’Connor
delivered the opinion of the Court.
These cases present the question whether conviction for conspiracy to commit money laundering, in violation of 18 Ü. S. C. § 1956(h), requires proof of an overt act in furtherance of the conspiracy. We hold that it does not.
I
In March 1999, a federal grand jury returned a 20-count indictment against petitioners and five codefendants. As relevant here, Count II of the indictment charged petitioners with conspiracy to launder money, in violation of § 1956(h). The indictment described, in general terms, the “manner and means” used to accomplish the objects of the money laundering conspiracy, but it did not charge the defendants with the commission of any overt act in furtherance thereof.
At trial, the Government presented evidence that petitioners were members of the executive board of an entity known as Greater Ministries International Church (GMIC). GMIC operated a “gifting” program that took in more than $400 million between 1996 and 1999. Under that program, petitioners and others induced unwary investors to give money to GMIC with promises that investors would receive double their money back within a year and a half. Petitioners marketed the program throughout the country, claiming that GMIC would generate returns on investors’ “gifts” through overseas investments in gold and diamond mining, commodities, and offshore banks. Investors were told that GMIC would use some of the profits for philanthropic purposes. Most of these claims were false. GMIC made none of the promised investments, had no assets, and gave virtually nothing to charity. Many participants in GMIC’s program received little or no return on their money, and their investments indeed largely turned out to be “gifts” to GMIC representatives. Petitioners together allegedly received more than $1.2 million in commissions on the money they solicited.
At the close of the evidence, petitioners asked the District Court to instruct the jury that the Government was required to prove beyond a reasonable doubt that at least one of the co-conspirators had committed an overt act in furtherance of the money laundering conspiracy. The court denied that request, and the jury returned a verdict of guilty on the money laundering conspiracy charge.
The Eleventh Circuit affirmed petitioners’ convictions, holding, in relevant part, that the jury instructions approved by the District Court were proper because § 1956(h) does not require proof of an overt act. 349 F. 3d 1320, 1324 (2003). The Court of Appeals noted that some of its sister Circuits had taken the opposite position. Id., at 1323 (citing United States v. Wilson, 249 F. 3d 366, 379 (CA5 2001); United States v. Hildebrand, 152 F. 3d 756, 762 (CA8 1998)). It concluded, however, that those decisions were erroneously based on case law interpreting the general conspiracy statute, 18 U. S. C. § 371, which, unlike § 1956(h), expressly includes an overt-act requirement. 349 F. 3d, at 1323. The Eleventh Circuit instead relied upon United States v. Shabani, 513 U. S. 10 (1994), where we held that the drug conspiracy statute, 21 U. S. C. § 846, does not require proof of an overt act. Because the language of 18 U. S. C. § 1956(h) and 21 U. S. C. § 846 is “nearly identical,” the Eleventh Circuit found itself compelled to follow the reasoning of Shabani in holding that § 1956(h), too, requires no proof of an overt act. 349 F. 3d, at 1323-1324. We granted certiorari to resolve the conflict among the Circuits on the question presented, 542 U. S. 918 (2004), and we now affirm the decision below.
II
Congress enacted 18 U. S. C. §§ 1956 and 1957 (2000 ed. and Supp. II) as part of the Money Laundering Control Act of 1986, Pub. L. 99-570, 100 Stat. 3207-18. Section 1956 penalizes the knowing and intentional transportation or transfer of monetary proceeds from specified unlawful activities, while § 1957 addresses transactions involving criminally derived property exceeding $10,000 in value. As originally enacted, neither section included a conspiracy provision. Accordingly, the Government relied on the general conspiracy statute, 18 U. S. C. §371, to prosecute conspiracies to commit the offenses set forth in §§ 1956 and 1957. In 1992, however, Congress enacted the money laundering conspiracy provision at issue in these cases, now codified at 18 U. S. C. § 1956(h). See Annunzio-Wylie Anti-Money Laundering Act, Pub. L. 102-550, § 1530, 106 Stat. 4066. Section 1956(h) provides: “Any person who conspires to commit any offense defined in [§1956] or section 1957 shall be subject to the same penalties as those prescribed for the offense thé commission of which was the object of the conspiracy.”
In Shabani, we addressed whether the nearly identical language of the drug conspiracy statute, 21 U. S. C. § 846, requires proof of an overt act. See ibid. (“Any person who attempts or conspires to commit any offense defined in this subchapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy”). We held that it does not, relying principally upon our earlier decisions in Nash v. United States, 229 U. S. 373 (1913), and Singer v. United States, 323 U. S. 338 (1945). See Shabani, supra, at 13-14. In each of those cases, the Court held that, where Congress had omitted from the relevant conspiracy provision any language expressly requiring an overt act, the Court would not read such a requirement into the statute. See Singer, supra, at 340 (Selective Training and Service Act of 1940); Nash, supra, at 378 (Sherman Act).
As we explained in Shabani, these decisions “follow the settled principle of statutory construction that, absent contrary indications, Congress intends to adopt the common law definition of statutory terms. See Molzof v. United States, 502 U. S. 301, 307-308 (1992). We have consistently held that the common law understanding of conspiracy ‘does not make the doing of any act other than the act of conspiring a condition of liability.’ ” 513 U. S., at 13-14 (quoting Nash, supra, at 378). In concluding that the drug conspiracy statute in Shabani did not require proof of an overt act, we found instructive the distinction between that statute and the general conspiracy statute, § 371, which supersedes the common law rule by expressly including an overt-act requirement. 513 U. S., at 14. See 18 U. S. C. § 371 (“If. two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both” (emphasis added)).
Shabani distilled the governing rule for conspiracy statutes as follows: “ ‘Nash and Singer give Congress a formu-lary: by choosing a text modeled on § 371, it gets an overt-act requirement; by choosing a text modeled on the Sherman Act, 15 U. S. C. § 1 [which, like 21 U. S. C. § 846, omits any express overt-act requirement], it dispenses with such a requirement.’” 513 U. S., at 14 (quoting United States v. Sassi, 966 F. 2d 283, 284 (CA7 1992)). This rule dictates the outcome in the instant cases as well: Because the text of § 1956(h) does not expressly make the commission of an overt act an element of the conspiracy offense, the Government need not prove an overt act to obtain a conviction.
III
Petitioners argue that the rule that governed Shabani is inapplicable here, because § 1956(h) does not establish a new conspiracy offense; rather, they say, it merely increases the penalty for conviction of a money laundering conspiracy under § 371. In other words, as we understand their argument, petitioners contend that the Government must continue to prosecute money laundering conspiracies under § 371, but that § 1956(h) now provides enhanced penalties for conviction. Since §371 contains an overt act requirement, the argument goes, the Government must prove an overt act in prosecutions ostensibly brought under § 1956(h). This reading of § 1956(h) is untenable for two principal reasons. First, petitioners concede — as they must — that §1956(h)’s text is sufficient to establish an offense. Indeed, its language is nearly identical to the drug conspiracy statute at issue in Shabani, which indisputably created an offense. Second, petitioners apparently read § 1956(h) to supply an enhanced penalty for violation of §371 in cases where the object of the conspiracy is to violate the substantive money laundering offenses in §§ 1956(a) and 1957. But the text of § 1956(h) fails to provide any cross-reference to § 371. Mere use of the word “conspires” surely is not enough to establish the necessary link between these two separate statutes. In short, if Congress had intended to create the scheme petitioners envision, it would have done so in clearer terms.
Petitioners seek support for their construction of § 1956(h) in the provision’s legislative history. They contend that this, history contains no indication that Congress meant to create a new offense or to eliminate the pre-existing overt-act requirement for money laundering conspiracy prosecutions that hitherto had been brought under § 371. They say that the history instead shows that § 1956(h) was intended only to raise the penalty for money laundering conspiracy from the 5-year maximum sentence under §371 to the greater máximums available for substantive money laundering offenses under §§ 1956(a) and 1957. Petitioners also point out that, when Congress enacted § 1956(h), it did so under the title “Penalty for Money Laundering Conspiracies,” 106 Stat., at 4066 (emphasis added). Had Congress wanted to enact an “offense” provision, they argue, it would have titled it accordingly.
Because the meaning of § 1956(h)’s text is plain and unambiguous, we need not accept petitioners’ invitation to consider the legislative history. But even were we to do so, we would reach the same conclusion. It is undisputed that Congress intended § 1956(h) to increase the penalties for money laundering conspiracies. The provision’s text makes clear that Congress did so precisely by establishing a new offense. Given the clarity of the text, mere silence in the legislative history cannot justify reading an overt-act requirement, or a cross-reference to § 371, into § 1956(h). See, e. g., United States v. Wells, 519 U. S. 482, 496-497 (1997) (refusing to read a materiality element into the statute at issue based on silence in the legislative history); Harrison v. PPG Industries, Inc., 446 U. S. 578, 692 (1980) (“[I]t would be a strange canon of statutory construction that would require Congress to state in committee reports or elsewhere in its deliberations that which is obvious on the face of a statute”). Nor do we find it significant that Congress chose to label § 1956(h) a “penalty” rather than an “offense” provision. See Pennsylvania Dept. of Corrections v. Yeskey, 524 U. S. 206, 212 (1998) (“ ‘[T]he title of a statute . . . cannot limit the plain meaning of the text’”); Castillo v. United States, 530 U. S. 120, 125 (2000) (although “[t]he title of the entirety of §924 is ‘Penalties’ ... at least some portion of §924 . . . creates, not penalty enhancements, but entirely new crimes”).
Petitioners’ legislative history argument is particularly inapt here, we might add, because Congress is presumed to have knowledge of the governing rule described in Shabani. While Shabani was decided two years after § 1956(h) was enacted, the rule it articulated was established decades earlier in Nash and Singer. These decisions establish a “for-mulary” that provides clear and predictable guidance to Congress. As the Government points out, Congress has included an express overt-act requirement in at least 22 other current conspiracy statutes, clearly demonstrating that it knows how to impose such a requirement when it. wishes to do so. See Brief for United States 11, and n. 5 (citing statutes). Where Congress has chosen not to do so, we will not override that choice based on vague and ambiguous signals from legislative history.
We conclude by addressing two arguments raised by petitioners relating to the text and structure of § 1956 as a whole. First, petitioners note that Congress placed each of the three substantive money laundering offenses in § 1956 under subsection (a). Had the drafters intended § 1956(h) to create a new offense, petitioners contend, they would have placed it with the other offenses in subsection (a) instead of in its own separate subsection. We fail to see why that should be so. The three offenses placed in subsection (a) share a common feature: All are substantive money laundering crimes. We find nothing remarkable in Congress' decision to place a qualitatively different conspiracy offense provision in a separate subsection.
Petitioners' second textual argument is based on § 1956(i) (2000 ed., Supp. II), a venue provision added to'the statute in 2001. See USA PATRIOT ACT, Pub. L. 107-56, §1004, 115 Stat. 392. Section 1956(i)(2) (2000 ed., Supp. II) provides that “[a] prosecution for an attempt or conspiracy offense under [§ 1956 or § 1957] may be brought in the district where venue would lie for the completed offense under [§ 1956(i)(l)], or in any other district where an act in furtherance of the attempt or conspiracy took place.” Petitioners contend that, by setting venue in the district where an overt act took place, Congress confirmed what (petitioners say) was the majority view of the Courts of Appeals at the time of § 1956(i)’s enactment: that proof of ah overt act was required under § 1956(h). Moreover, petitioners argue, setting venue where an overt act took place makes little sense if such an act is not an element of the offense.
This argument fails for several reasons. As a preliminary matter, petitioners assume that § 1956(i) is the sole provision setting venue in money laundering conspiracy prosecutions. Although we need not definitively construe that provision here, we note that its language appears permissive rather than exclusive — § 1956(i) says a conspiracy prosecution “may be brought” in a district meeting the specified criteria. (Emphasis added.) This suggests that the provision serves to supplement, rather than supplant, the default venue rule: “Unless a statute or these rules permit otherwise, the government must prosecute an offense in a district where the offense was committed.” Fed. Rule Crim. Proc. 18. For a conspiracy prosecution under the common law rule, the district in which the unlawful agreement was reached would satisfy this default venue rule. See Hyde v. Shine, 199 U. S. 62, 76 (1905).
But even if we assume, for the sake of argument, that §1956(i) is an exclusive venue provision, petitioners’ argument still fails. The provision authorizes two alternative venues for money laundering conspiracy prosecutions: (1) the district in which venue would lie if the completed substantive money laundering offense had been accomplished, or (2) any district in which an overt act in furtherance of the conspiracy was committed. The first venue option clearly does not require that any overt act have been committed, and the Government therefore need not allege or prove such an act for venue to be properly established under this portion of § 1956(i). As to the second venue option, this Court has long held that venue is proper in any district in which an overt act in furtherance of the conspiracy was committed, even where an overt act is not a required element of the conspiracy offense. See, e.g., United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 252 (1940); United States v. Trenton Potteries Co., 273 U. S. 392, 402-404 (1927). In light of this longstanding rule, § 1956(i)(2)’s authorization of venue in a district where an overt act took place cannot be taken to indicate that Congress deemed such an act necessary for conviction under § 1956(h). Instead, Congress appears merely to have confirmed the availability of this alternative venue option in money laundering conspiracy cases.
* * *
For the reasons set forth above, we hold that conviction for conspiracy to commit money laundering, in violation of 18 U. S. C. § 1956(h), does not require proof of an overt act in furtherance of the conspiracy. Accordingly, the judgment of the Court of Appeals is affirmed.
It is so ordered.
Question: What is the disposition of the case, that is, the treatment the Supreme Court accorded the court whose decision it reviewed?
A. stay, petition, or motion granted
B. affirmed (includes modified)
C. reversed
D. reversed and remanded
E. vacated and remanded
F. affirmed and reversed (or vacated) in part
G. affirmed and reversed (or vacated) in part and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to or from a lower court
K. no disposition
Answer:
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sc_issuearea
|
B
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BROWN et al. v. THOMSON, SECRETARY OF STATE OF WYOMING, et al.
No. 82-65.
Argued March 21, 1983
Decided June 22, 1983
Powell, J., delivered the opinion of the Court, in which BURGER, C. J., and Rehnquist, Stevens, and O’Connor, JJ., joined. O’Connor, J., filed a concurring opinion, in which Stevens, J., joined, post, p. 848. Brennan, J., filed a dissenting opinion, in which White, Marshall, and Blackmun, JJ., joined, post, p. 850.
Sue Davidson argued the cause and filed a brief for appellants.
Randall T. Cox, Assistant Attorney General of Wyoming, argued the cause pro hac vice for appellees Thyra Thomson et al. With him on the brief were A. G. McClintock, Attorney General, and Peter J. Mulvaney, Deputy Attorney General. Richard Barrett filed a brief for appellees James L. Thomson et al.
Justice Powell
delivered the opinion of the Court.
The issue is whether the State of Wyoming violated the Equal Protection Clause by allocating one of the 64 seats in its House of Representatives to a county the population of which is considerably lower than the average population per state representative.
I
Since Wyoming became a State in 1890, its legislature has consisted of a Senate and a House of Representatives. The State’s Constitution provides that each of the State’s counties “shall constitute a senatorial and representative district” and that “[e]ach county shall have at least one senator and one representative.” The senators and representatives are required to be “apportioned among the said counties as nearly as may be according to the number of their inhabitants.” Wyo. Const., Art. 3, §3. The State has had 23 counties since 1922. Because the apportionment of the Wyoming House has been challenged three times in the past 20 years, some background is helpful.
In 1963 voters from the six most populous counties filed suit in the District Court for the District of Wyoming challenging the apportionment of the State’s 25 senators and 61 representatives. The three-judge District Court held that the apportionment of the Senate — one senator allocated to each of the State’s 23 counties, with the two largest counties having two senators — so far departed from the principle of population equality that it was unconstitutional. Schaefer v. Thomson, 240 F. Supp. 247, 251-252 (Wyo. 1964), supplemented, 251 F. Supp. 450 (1965), aff’d sub nom. Harrison v. Schaefer, 383 U. S. 269 (1966). But the court upheid the apportionment of the State House of Representatives. The State’s constitutional requirement that each county shall have at least one representative had produced deviations from population equality: the average deviation from the ideal number of residents per representative was 16%, while the maximum percentage deviation between largest and smallest number of residents per representative was 90%. See 1 App. Exhibits 16. The District Court held that these population disparities were justifiable as “the result of an honest attempt, based on legitimate considerations, to effectuate a rational and practical policy for the house of representatives under conditions as they exist in Wyoming.” 240 F. Supp., at 251.
The 1971 reapportionment of the House was similar to that in 1963, with an average deviation of 15% and a maximum deviation of 86%. 1 App. Exhibits 18. Another constitutional challenge was brought in the District Court. The three-judge court again upheld the apportionment of the House, observing that only “five minimal adjustments” had been made since 1963, with three districts gaining a representative and two districts losing a representative because of population shifts. Thompson v. Thomson, 344 F. Supp. 1378, 1380 (Wyo. 1972).
The present case is a challenge to Wyoming’s 1981 statute reapportioning its House of Representatives in accordance with the requirements of Art. 3, § 3, of the State Constitution. Wyo. Stat. §28-2-109 (Supp. 1983). The 1980 census placed Wyoming’s population at 469,557. The statute provided for 64 representatives, meaning that the ideal apportionment would be 7,337 persons per representative. Each county was given one representative, including the six counties the population of which fell below 7,337. The deviations from population equality were similar to those in prior decades, with an average deviation of 16% and a maximum deviation of 89%. See 1 App. Exhibits 19-20.
The issue in this case concerns only Niobrara County, the State’s least populous county. Its population of 2,924 is less than half of the ideal district of 7,337. Accordingly, the general statutory formula would have dictated that its population for purposes of representation be rounded down to zero. See § 28 — 2—109(a)(ii). This would have deprived Niobrara County of its own representative for the first time since it became a county in 1913. The state legislature found, however, that “the opportunity for oppression of the people of this state or any of them is greater if any county is deprived a representative in the legislature than if each is guaranteed at least one (1) representative.” It therefore followed the State Constitution’s requirement and expressly provided that a county would receive a representative even if the statutory formula rounded the county’s population to zero. § 28 — 2—109(a)(iii). Niobrara County thus was given one seat in a 64-seat House. The legislature also provided that if this representation for Niobrara County were held unconstitutional, it would be combined with a neighboring county in a single representative district. The House then would consist of 63 representatives. § 28-2-109(a)(iv).
Appellants, members of the state League of Women Voters and residents of seven counties in which the population per representative is greater than the state average, filed this lawsuit in the District Court for the District of Wyoming. They alleged that “[b]y granting Niobrara County a representative to which it is not statutorily entitled, the voting privileges of Plaintiffs and other citizens and electors of Wyoming similarly situated have been improperly and illegally diluted in violation of the 14th Amendment. . . .” App. 3-4. They sought declaratory and injunctive relief that would prevent the State from giving a separate representative to Nio-brara County, thus implementing the alternative plan calling for 63 representatives.
The three-judge District Court upheld the constitutionality of the statute. 536 F. Supp. 780 (1982). The court noted that the narrow issue presented was the alleged discriminatory effect of a single county’s representative, and concluded, citing expert testimony, that “the ‘dilution’ of the plaintiffs’ votes is de minimis when Niobrara County has its own representative.” Id., at 783. The court also found that Wyoming’s policy of granting a representative to each county was rational and, indeed, particularly well suited to the special needs of Wyoming. Id., at 784.
We noted probable jurisdiction, 459 U. S. 819 (1982), and now affirm.
HH H-1
A
In Reynolds v. Sims, 377 U. S. 533, 568 (1964), the Court held that “the Equal Protection Clause requires that the seats in both houses of a bicameral state legislature must be apportioned on a population basis.” This holding requires only “that a State make an honest and good faith effort to construct districts ... as nearly of equal population as is practicable,” for “it is a practical impossibility to arrange legislative districts so that each one has an identical number of residents, or citizens, or voters.” Id., at 577. See Gaffney v. Cummings, 412 U. S. 735, 745-748 (1973) (describing various difficulties in measurement of population).
We have recognized that some deviations from population equality may be necessary to permit the States to pursue other legitimate objectives such as “maintain[ing] the integrity of various political subdivisions” and “providing] for compact districts of contiguous territory.” Reynolds, supra, at 578. As the Court stated in Gaffney, “[a]n unrealistic overemphasis on raw population figures, a mere nose count in the districts, may submerge these other considerations and itself furnish a ready tool for ignoring factors that in day-to-day operation are important to an acceptable representation and apportionment arrangement.” 412 U. S., at 749.
In view of these considerations, we have held that “minor deviations from mathematical equality among state legislative districts are insufficient to make out a prima facie case of invidious discrimination under the Fourteenth Amendment so as to require justification by the State.” Id., at 745. Our decisions have established, as a general matter, that an apportionment plan with a maximum population deviation under 10% falls within this category of minor deviations. See, e. g., Connor v. Finch, 431 U. S. 407, 418 (1977); White v. Regester, 412 U. S. 755, 764 (1973). A plan with larger disparities in population, however, creates a prima facie case of discrimination and therefore must be justified by the State. See Swann v. Adams, 385 U. S. 440, 444 (1967) (“De minimis deviations are unavoidable, but variations of 30% among senate districts and 40% among house districts can hardly be deemed de minimis and none of our cases suggests that differences of this magnitude will be approved without a satisfactory explanation grounded on acceptable state policy”). The ultimate inquiry, therefore, is whether the legislature’s plan “may reasonably be said to advance [a] rational state policy” and, if so, “whether the population disparities among the districts that have resulted from the pursuit of this plan exceed constitutional limits.” Mahan v. Howell, 410 U. S. 315, 328 (1973).
B
In this case there is no question that Niobrara County’s deviation from population equality — 60% below the mean — is more than minor. There also can be no question that Wyoming’s constitutional policy — followed since statehood — of using counties as representative districts and ensuring that each county has one representative is supported by substantial and legitimate state concerns. In Abate v. Mundt, 403 U. S. 182, 185 (1971), the Court held that “a desire to preserve the integrity of political subdivisions may justify an apportionment plan which departs from numerical equality.” See Mahan v. Howell, supra, at 329. Indeed, the Court in Reynolds v. Sims, supra, singled out preservation of political subdivisions as a clearly legitimate policy. See 377 U. S., at 580-581.
Moreover, it is undisputed that Wyoming has applied this factor in a manner “free from any taint of arbitrariness or discrimination.” Roman v. Sincock, 377 U. S. 695, 710 (1964). The State’s policy of preserving county boundaries is based on the State Constitution, has been followed for decades, and has been applied consistently throughout the State. As the District Court found, this policy has particular force, given the peculiar size and population of the State and the nature of its governmental structure. See n. 5, supra; 536 F. Supp., at 784. In addition, population equality is the sole other criterion used, and the State’s apportionment formula ensures that population deviations are no greater than necessary to preserve counties as representative districts. See Mahan v. Howell, supra, at 326 (evidence is clear that the plan “ ‘produces the minimum deviation above and below the norm, keeping intact political boundaries’ ”). Finally, there is no evidence of “a built-in bias tending to favor particular political interests or geographic areas.” Abate v. Mundt, supra, at 187. As Judge Doyle stated below:
“[T]here is not the slightest sign of any group of people being discriminated against here. There is no indication that the larger cities or towns are being discriminated against; on the contrary, Cheyenne, Laramie, Casper, Sheridan, are not shown to have suffered in the slightest . . . degree. There has been no preference for the cattle-raising or agricultural areas as such.” 536 F. Supp., at 788 (specially concurring).
In short, this case presents an unusually strong example of an apportionment plan the population variations of which are entirely the result of the consistent and nondiscriminatory application of a legitimate state policy. This does not mean that population deviations of any magnitude necessarily are acceptable. Even a neutral and consistently applied criterion such as use of counties as representative districts can frustrate Reynolds’ mandate of fair and effective representation if the population disparities are excessively high. “[A] State’s policy urged in justification of disparity in district population, however rational, cannot constitutionally be permitted to emasculate the goal of substantial equality.” Mahan v. Howell, supra, at 326. It remains true, however, as the Court in Reynolds noted, that consideration must be given “to the character as well as the degree of deviations from a strict population basis.” 377 U. S., at 581. The consistency of application and the neutrality of effect of the nonpopulation criteria must be considered along with the size of the population disparities in determining whether a state legislative apportionment plan contravenes the Equal Protection Clause.
C
Here we are not required to decide whether Wyoming’s nondiscriminatory adherence to county boundaries justifies the population deviations that exist throughout Wyoming’s representative districts. Appellants deliberately have limited their challenge to the alleged dilution of their voting power resulting from the one representative given to Nio-brara County. The issue therefore is not whether a 16% average deviation and an 89% maximum deviation, considering the state apportionment plan as a whole, are constitutionally permissible. Rather, the issue is whether Wyoming’s policy of preserving county boundaries justifies the additional deviations from population equality resulting from the provision of representation to Niobrara County.
It scarcely can be denied that in terms of actual effect on appellants’ voting power, it matters little whether the 63-member or 64-member House is used. The District Court noted, for example, that the seven counties in which appellants reside will elect 28 representatives under either plan. The only difference, therefore, is whether they elect 43.75% of the legislature (28 of 64 members) or 44.44% of the legislature (28 of 63 members). 536 F. Supp., at 783. The District Court aptly described this difference as “de minimis.” Ibid.
We do not suggest that a State is free to create and allocate an additional representative seat in any way it chooses simply because that additional seat will have little or no effect on the remainder of the State’s voters. The allocation of a representative to a particular political subdivision still may violate the Equal Protection Clause if it greatly exceeds the population variations existing in the rest of the State and if the State provides no legitimate justifications for the creation of that seat. Here, however, considerable population variations will remain even if Niobrara County’s representative is eliminated. Under the 63-member plan, the average deviation per representative would be 13% and the maximum deviation would be 66%. See 1 App. Exhibits 22. These statistics make clear that the grant of a representative to Niobrara County is not a significant cause of the population deviations that exist in Wyoming.
Moreover, we believe that the differences between the two plans are justified on the basis of Wyoming’s longstanding and legitimate policy of preserving county boundaries. See swpra, at 841, n. 5, and 843-844. Particularly where there is no “taint of arbitrariness or discrimination,” Roman v. Sincock, 377 U. S., at 710, substantial deference is to be accorded the political decisions of the people of a State acting through their elected representatives. Here it is noteworthy that by enacting the 64-member plan the State ensured that its policy of preserving county boundaries applies nondiscriminatorily. The effect of the 63-member plan would be to deprive the voters of Niobrara County of their own representative, even though the remainder of the House of Representatives would be constituted so as to facilitate representation of the interests of each county. See 536 F. Supp., at 784; id., at 786 (Doyle, J., specially concurring). In these circumstances, we are not persuaded that Wyoming has violated the Fourteenth Amendment by permitting Nio-brara County to have its own representative.
The judgment of the District Court is
Affirmed.
Article 3, § 3, of the Wyoming Constitution provides in relevant part: “Each county shall constitute a senatorial and representative district; the senate and house of representatives shall be composed of members elected by the legal voters of the counties respectively, every two (2) years. They shall be apportioned among the said counties as nearly as may be according to the number of their inhabitants. Each county shall have at least one senator and one representative; but at no time shall the number of members of the house of representatives be less than twice nor greater than three times the number of members of the senate.”
An example of the disparity in population was that Laramie County, the most populous county in the State, had two senators for its 60,149 people, whereas Teton County, the least populous county in the State, had one senator for its 3,062 people. See Schaefer v. Thomson, 240 F. Supp., at 250, n. 3.
Wyoming Stat. §28-2-109 (Supp. 1982) provides in relevant part:
“(a) The ratios for the apportionment of senators and representatives are fixed as follows:
“(ii) The ratio for the apportionment of the representatives is the smallest number of people per representative which when divided into the population in each representative district as shown by'the official results of the 1980 federal decennial census with fractions rounded to the nearest whole number results in a house with sixty-three (63) representatives;
“(iii) If the number of representatives for any county is rounded to zero (0) under the formula in paragraph (a)(ii) of this section, that county shall be given one (1) representative which is in addition to the sixty-three (63) representatives provided by paragraph (a)(ii) of this section;
“(iv) If the provisions of paragraph (a)(iii) of this section are found to be unconstitutional or have an unconstitutional result, then Niobrara county shall be joined to Goshen county in a single representative district and the house of representatives shall be apportioned as provided by paragraph (a)(ii) of this section.”
The legislature made the following findings:
“It is hereby declared the policy of this state is to preserve the integrity of county boundaries as election districts for the house of representatives. The legislature has considered the present population, needs, and other characteristics of each county. The legislature finds that the needs of each county are unique and the interests of each county must be guaranteed a voice in the legislature. The legislature therefore, will utilize the provisions of article 3, section 3, of the Wyoming constitution as the determining standard in the reapportionment of the Wyoming house of representatives which guarantees each county at least one (1) representative. The legislature finds that the opportunity for oppression of the people of this state or any of them is greater if any county is deprived a representative in the legislature than if each is guaranteed at least one (1) representative. The legislature finds that the dilution of the power of counties which join together in making these declarations is trivial when weighed against the need to maintain the integrity of county boundaries. The legislature also finds that it is not practical or necessary to increase the size of the legislature beyond the provisions of this act in order to meet its obligations to apportion in accordance with constitutional requirements consistent with this declaration.” 1981 Wyo. Sess. Laws, ch. 76, §3.
The District Court stated:
“Wyoming as a state is unique among her sister states. A small population is encompassed by a large area. Counties have always been a major form of government in the State. Each county has its own special economic and social needs. The needs of the people are different and distinctive. Given the fact that the representatives from the combined counties of Niobrara and Goshen would probably come from the larger county, i. e., Goshen, the interests of the people of Niobrara County would be virtually unprotected.
“The people within each county have many interests in common such as public facilities, government administration, and work and personal problems. Under the facts of this action, to deny these people their own representative borders on abridging their right to be represented in the determination of their futures.
“In Wyoming, the counties are the primary administrative agencies of the State government. It has historically been the policy of the State that counties remain in this position.
“The taxing powers of counties are limited by the Constitution and some State statutes. Supplemental monies are distributed to the counties in accordance with appropriations designated by the State Legislature. It comes as no surprise that the financial requirements of each county are different. Without representation of their own in the State House of Representatives, the people of Niobrara County could well be forgotten.” 536 F. Supp., at 784.
In contrast, many of our prior decisions invalidating state apportionment plans were based on the lack of proof that deviations from population equality were the result of a good-faith application of legitimate districting criteria. See, e. g., Chapman v. Meier, 420 U. S. 1, 25 (1975) (“It is far from apparent that North Dakota policy currently requires or favors strict adherence to political lines. . . . Furthermore, a plan devised by [the Special Master] demonstrates that. . . the policy of maintaining township lines [does not] preven[t] attaining a significantly lower population variance”); Kilgarlin v. Hill, 386 U. S. 120, 124 (1967) (per curiam) (District Court did not “demonstrate why or how respect for the integrity of county lines required the particular deviations” or “articulate any satisfactory grounds for rejecting at least two other plans presented to the court, which respected county lines but which produced substantially smaller deviations”); Swann v. Adams, 385 U. S. 440, 445-446 (1967) (no evidence presented that would justify the population disparities).
As the Reynolds Court explained:
“Carried too far, a scheme of giving at least one seat in one house to each political subdivision (for example, to each county) could easily result, in many States, in a total subversion of the equal-protection principle in that legislative body. This would be especially true in a State where the number of counties is large and many of them are sparsely populated, and the number of seats in the legislative body being apportioned does not significantly exceed the number of counties.” 377 U. S., at 581.
See also Connor v. Finch, 431 U. S. 407, 419 (1977) (“[T]he policy against breaking county boundary lines is virtually impossible of accomplishment in a State where population is unevenly distributed among 82 counties, from which 52 Senators and 122 House members are to be elected”).
This discussion in Reynolds is illustrated by the senatorial districts in Wyoming that were invalidated in 1963. Each county in the State had one senator, while the two largest counties had two. Because county population varied substantially, extremely large disparities in population per senator resulted. The six most populous counties, with approximately 65% of the State’s population, had eight senators, whereas the six least populous counties, with approximately 8% of the population, had six senators. See Schaefer v. Thomson, 240 F. Supp., at 251, n. 5. The Wyoming House of Representatives presents a different case because the number of representatives is substantially larger than the number of counties.
Counsel for appellants, who represent the state League of Women Voters, explained at oral argument: “[A] referendum had been passed by the League of Women Voters which authorized the attack of only that one portion of the reapportionment plan. It was felt by the membership or by the leadership of that group that no broader authority would ever be given because of the political ramifications and arguments that would be presented by the membership in attacking or considering . . . that broader authority.” Tr. of Oral Arg. 8.
The dissent suggests that we are required to pass upon the constitutionality of the apportionment of the entire Wyoming House of Representatives. See post, at 857-859 (Brennan, J., dissenting). Although in some prior cases challenging the apportionment of one legislative house the Court has addressed the constitutionality of the other house’s apportionment as well, we never have held that a court is required to do so. For example, in Gaffney v. Cummings, 412 U. S. 735 (1973), we considered only the apportionment of the Connecticut General Assembly, noting expressly that the “Senate plan was not challenged in the District Court” and that “[a]ppellees do not challenge the Senate districts on the ground of their population deviations.” Id., at 739, n. 5. In this case, we see no reason why appellants should not be bound by the choices they made when filing this lawsuit.
Similarly, appellees note that under the 64-member plan, 46.65% of the State’s voters theoretically could elect 51.56% of the representatives. Under the 63-member plan, 46.65% of the population could elect 50.79% of the representatives. See 1 App. Exhibits 32-33.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer:
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sc_authoritydecision
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G
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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the bases on which the Supreme Court rested its decision with regard to the legal provision that the Court considered in the case. Consider "judicial review (national level)" if the majority determined the constitutionality of some action taken by some unit or official of the federal government, including an interstate compact. Consider "judicial review (state level)" if the majority determined the constitutionality of some action taken by some unit or official of a state or local government. Consider "statutory construction" for cases where the majority interpret a federal statute, treaty, or court rule; if the Court interprets a federal statute governing the powers or jurisdiction of a federal court; if the Court construes a state law as incompatible with a federal law; or if an administrative official interprets a federal statute. Do not consider "statutory construction" where an administrative agency or official acts "pursuant to" a statute, unless the Court interprets the statute to determine if administrative action is proper. Consider "interpretation of administrative regulation or rule, or executive order" if the majority treats federal administrative action in arriving at its decision.Consider "diversity jurisdiction" if the majority said in approximately so many words that under its diversity jurisdiction it is interpreting state law. Consider "federal common law" if the majority indicate that it used a judge-made "doctrine" or "rule; if the Court without more merely specifies the disposition the Court has made of the case and cites one or more of its own previously decided cases unless the citation is qualified by the word "see."; if the case concerns admiralty or maritime law, or some other aspect of the law of nations other than a treaty; if the case concerns the retroactive application of a constitutional provision or a previous decision of the Court; if the case concerns an exclusionary rule, the harmless error rule (though not the statute), the abstention doctrine, comity, res judicata, or collateral estoppel; or if the case concerns a "rule" or "doctrine" that is not specified as related to or connected with a constitutional or statutory provision. Consider "Supreme Court supervision of lower federal or state courts or original jurisdiction" otherwise (i.e., the residual code); for issues pertaining to non-statutorily based Judicial Power topics; for cases arising under the Court's original jurisdiction; in cases in which the Court denied or dismissed the petition for review or where the decision of a lower court is affirmed by a tie vote; or in workers' compensation litigation involving statutory interpretation and, in addition, a discussion of jury determination and/or the sufficiency of the evidence.
HOSTETTER et al. v. IDLEWILD BON VOYAGE LIQUOR CORP.
No. 116.
Argued March 23, 1964.
Decided June 1, 1964.
Irving Galt, Assistant Solicitor General of New York, argued the cause for appellants. With him on the briefs were Louis J. Lefkowitz, Attorney General of New York, and George D. Zuckerman, Assistant Attorney General.
Charles H. Tuttle argued the cause for appellee. With him on the brief was John F. Kelly.
Mr. Justice Stewart
delivered the opinion of the Court.
The Twenty-first Amendment to the Constitution, which repealed the Eighteenth, provides in its second section that “The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in viola^ tion of the laws thereof, is hereby prohibited.” This appeal requires consideration of the relationship of this provision of the Twenty-first Amendment to other provisions of the Constitution, particularly the Commerce Clause.
The appellee (Idlewild) is engaged in the business of selling bottled wines and liquors to departing international airline travelers at the John F. Kennedy Airport in New York. Its place of business is leased from the Port of New York Authority for use solely as “an office in connection with the sale ... of in-bond wines and liquors.” Idlewild accepts orders only from travelers whose tickets and boarding cards indicate their imminent departure. A customer gets nothing but a receipt at the time he gives his order and makes payment. The liquor which he orders is transferred directly to the departing aircraft on documents approved by United States Customs, and is not delivered to the customer until he arrives at his foreign destination.
The beverages sold by Idlewild are purchased by it from bonded wholesalers located outside New York State who deal in tax-free liquors for export. Merchandise ordered by Idlewild is withdrawn from bonded warehouses on approved Customs documents, copies of which are mailed by the wholesalers both to Idlewild and to the United States Customs Office at the airport. A third sealed copy of the document is given to the bonded trucker who delivers it to the Customs Office at the airport after he has transported the shipment to Idlewild’s place of business. The contents of each shipment are recorded by Idlewild, as are withdrawals from inventory whenever a sale is made, and when an entire shipment has been sold, these records are turned over to Customs officials. Idlewild’s records and its physical inventory, as well as the transfer of the liquor from the bonded trucks to Idlewild’s premises and from those premises to the departing aircraft, are at all times open to inspection by the Bureau of Customs. Before Idlewild commenced these business operations in 1960, the Bureau of Customs inspected its place of business and explicitly approved its proposed method of operations.
Idlewild commenced doing business in the spring of 1960. A few weeks later, the New York State Liquor Authority, whose members are the appellants in this case, informed Idlewild, upon the advice of the Attorney General of New York, that its business was illegal under the provisions of the New York Alcoholic Beverage Control Law, because the business was unlicensed and unlicensable under that law. Idlewild thereupon brought the present action for an injunction restraining the appellants from interfering with its business, and for a judgment declaring that the provisions of the New York statute, as applied to its business, were repugnant to the Commerce Clause of the Constitution, and, under the Supremacy-Clause, to the Tariff Act of 1930, under which the Bureau of Customs had approved Idlewild’s business operations.
After lengthy procedural delays, a three-judge District Court granted the requested relief. 212 F. Supp. 376. The court expressed doubt that the New York Alcoholic Beverage Control Law was intended to apply to a business such as that carried on by Idlewild, both because of the manifest irrelevance to such a business of many of the law’s provisions, and because the New York courts had held that the law was inapplicable to the sale of liquor in the Free Trade Zone of the Port of New York. During v. Valente, 267 App. Div. 383, 46 N. Y. S. 2d 385. See also Rosenblum v. Frankel, 279 App. Div. 66, 108 N. Y. S. 2d 6. In view of the posture of the litigation, the court declined, however, to defer deciding the merits of the controversy pending a construction of the statute by the New York courts, although recognizing that “a technical application of the doctrine of abstention” would under ordinary circumstances counsel such a course.
On the merits the court concluded, after reviewing the relevant cases, that the Commerce Clause rendered constitutionally impermissible New York’s attempt wholly to terminate Idlewild’s business operations. The court conceded that New York has broad power under the Twenty-first Amendment to supervise and regulate the transportation of liquor through its territory for the purpose of guarding against a diversion of such liquor into domestic channels, but pointed out that “the Liquor Authority has neither alleged nor proved the diversion of so much as one bottle of plaintiff’s merchandise to users within the state of New York.” 212 F. Supp., at 386. We noted probable jurisdiction, 375 U. S. 809, and for the reasons which follow, we affirm the judgment of the District Court.
We hold first that the District Court did not err in declining to defer to the state courts before deciding this controversy on its merits. The doctrine of abstention is equitable in its origins, Railroad Comm’n v. Pullman Co., 312 U. S. 496, 500-501, and this Court has held that, even though constitutional issues be involved, “reference to the state courts for construction of the statute should not automatically be made.” N. A. A. C. P. v. Bennett, 360 U. S. 471. Unlike many cases in which abstention has been held appropriate, there was here no danger that a federal decision would work a disruption of an entire legislative scheme of regulation. We therefore accept the District Court’s decision that abstention was unwarranted here, where neither party requested it and where the litigation had already been long delayed, despite the plaintiff’s efforts to expedite the proceedings.
Turning, then, to the merits of this controversy, the basic issue we face is whether the Twenty-first Amendment so far obliterates the Commerce Clause as to empower New York to prohibit absolutely the passage of liquor through its territory, under the supervision of the United States Bureau of Customs acting under federal law, for delivery to consumers in foreign countries. For it is not disputed that, if the commodity involved here were not liquor, but grain or lumber, the Commerce Clause would clearly deprive New York of any such power. Lemke v. Farmers Grain Co., 258 U. S. 50; Texas & N. O. R. Co. v. Sabine Tram Co., 227 U. S. 111; Oklahoma v. Kansas Nat. Gas Co., 221 U. S. 229.
This Court made clear in the early years following adoption of the Twenty-first Amendment that by virtue of its provisions a State is totally unconfined by traditional Commerce Clause limitations when it restricts the importation of intoxicants destined for use, distribution, or consumption within its borders. Thus, in upholding a State’s power to impose a license fee upon importers of beer, the Court pointed out that “[p]rior to the Twenty-first Amendment it would obviously have been unconstitutional to have imposed any fee for that privilege. The imposition would have been void, . . . because the fee would be a direct burden on interstate commerce; and the commerce clause confers the right to import merchandise free into any state, except as Congress may otherwise provide.” State Board v. Young’s Market Co., 299 U. S. 59, 62. In the same vein, the Court upheld a Michigan statute prohibiting Michigan dealers from selling beer manufactured in a State which discriminated against Michigan beer. Brewing Co. v. Liquor Comm’n, 305 U. S. 391. “Since the Twenty-first Amendment, . . . the right of a state to prohibit or regulate the importation of intoxicating liquor is not limited by the commerce clause . . . .” Id., at 394. See also Finch & Co. v. McKittrick, 305 U. S. 395.
This view of the scope of the Twenty-first Amendment with respect to a State’s power to restrict, regulate, or prevent the traffic and distribution of intoxicants within its borders has remained unquestioned. See California v. Washington, 358 U. S. 64. Thus, in Ziffrin, Inc., v. Reeves, 308 U. S. 132, there was involved a Kentucky statute, “a long, comprehensive measure (123 sections) designed rigidly to regulate the production and distribution of alcoholic beverages through means of licenses and otherwise. The manifest purpose is to channelize the traffic, minimize the commonly attendant evils; also to facilitate the collection of revenue. To this end manufacture, sale, transportation, and possession are permitted only under carefully prescribed conditions and subject to constant control by the State.” Id., at 134. The Court upheld a provision of that “comprehensive measure” which prohibited a domestic manufacturer of liquor from delivering his product to an unlicensed private carrier. The Court noted that “Kentucky has seen fit to permit manufacture of whiskey only upon condition that it be sold to an indicated class of customers and transported in definitely specified ways. These conditions are not unreasonable and are clearly appropriate for effectuating the policy of limiting traffic in order to minimize well-known evils, and secure payment of revenue. The statute declares whiskey removed from permitted channels contraband subject to immediate seizure. This is within the police power of the State; and property so circumstanced cannot be regarded as a proper article of commerce.” Id., at 139.
To draw a conclusion from this line of decisions that the Twenty-first Amendment has somehow operated to “repeal” the Commerce Clause wherever regulation of intoxicating liquors is concerned would, however, be an absurd oversimplification. If the Commerce Clause had been pro tanto “repealed,” then Congress would be left with no regulatory power over interstate or foreign commerce in intoxicating liquor. Such a conclusion would be patently bizarre and is demonstrably incorrect. In Jameson & Co. v. Morgenthau, 307 U. S. 171, “the Federal Alcohol Administration Act was attacked upon the ground that the Twenty-first Amendment to the Federal Constitution gives to the States complete and exclusive control over commerce in intoxicating liquors, unlimited by the commerce clause, and hence that Congress has no longer authority to control the importation of these commodities into the United States.” The Court’s response to this theory was a blunt one: “We see no substance in this contention.” Id., at 172-173. See also United States v. Frankfort Distilleries, 324 U. S. 293. (Sherman Act.)
Both the. Twenty-first Amendment and the Commerce Clause are parts of the same Constitution. Like other provisions of the Constitution, each must be considered in the light of the other, and in the context of the issues and interests at stake in any concrete case.
This principle is reflected in the Court’s decision in Collins v. Yosemite Park Co., 304 U. S. 518. There it was held that the Twenty-first Amendment did not give California power to prevent the shipment into and through her territory of liquor destined for distribution and consumption in a national park. The Court said that this trafile did not involve “transportation into California 'for delivery or use therein’ ” within the meaning of the Amendment. “The delivery and use is in the Park, and under a distinct sovereignty.” Id., at 538. This ruling was later characterized by the Court as holding “that shipment through a state is not transportation or importation into the state within the meaning of the Amendment.” Carter v. Virginia, 321 U. S. 131, 137. See also Johnson v. Yellow Cab Co., 321 U. S. 383, aff’g, 137 F. 2d 274.
We may assume that if in Collins California had sought to regulate or control the transportation of the liquor there involved from the time of its entry into the State until its delivery at the national park, in the interest of preventing unlawful diversion into her territory, California would have been constitutionally permitted to do so. But the Court held that California could not prevent completely the transportation of the liquor across the State’s territory for delivery and use in a federal enclave within it.
A like accommodation of the Twenty-first Amendment with the Commerce Clause leads to a like conclusion in the present case. Here, ultimate delivery and use is not in New York, but in a foreign country. The State has not sought to regulate or control the passage of intoxicants through her territory in the interest of preventing their unlawful diversion into the internal commerce of the State. As the District Court emphasized, this case does not involve “measures aimed at preventing unlawful diversion or use of alcoholic beverages within New York.” 212 F. Supp., at 386. Rather, the State has sought totally to prevent transactions carried on under the aegis of a law passed by Congress in the exercise of its explicit power under the Constitution to regulate commerce with foreign nations. This New York cannot constitutionally do.
Affirmed.
Mr. Justice Brennan took no part in the consideration or decision of this case.
“The Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” U. S. Const., Art. I, § 8, cl. 3.
The opinion of the New York Attorney General was based primarily upon the following provisions of the New York law:
“ ‘Sale’ means any transfer, exchange or barter in any manner or by any means whatsoever for a consideration, and includes and means all sales made by any person, whether principal, proprietor, agent, servant or employee of any alcoholic beverage and/or a warehouse receipt pertaining thereto. ‘To sell’ includes to solicit or receive an order for, to keep or expose for sale, and to keep with intent to sell and shall include the delivery of any alcoholic beverage in the state.” New York Alcoholic Beverage Control Law, § 3, Subd. 28.
“No person shall manufacture for sale or sell at wholesale or retail any alcoholic beverage within the state without obtaining the appropriate license therefor required by this chapter.” New York Alcoholic Beverage Control Law, § 100, Subd. 1.
“No premises shall be licensed to sell liquors and/or wines at retail for off premises consumption, unless said premises shall be located in a store, the entrance to which shall be from the street level and located on a public thoroughfare in premises which may be occupied, operated or conducted for business, trade or industry or on an arcade or sub-surface thoroughfare leading to a railroad terminal.” New York Alcoholic Beverage Control Law, § 105, Subd. 2.
See 19 U. S. C. § 1311. The complaint also relied on the Export-Import Clause of the Constitution, Art. I, § 10, cl. 2, but such reliance was obviously misplaced, because New York has not sought to “lay any Imposts or Duties” upon the merchandise sold by Idlewild.
The appellee’s original motion to empanel a three-judge court under 28 U. S. C. §§ 2281 and 2284 was denied by a single district judge, who retained jurisdiction pending resolution of the substantive issues by the state courts. 188 F. Supp. 434. The Court of Appeals for the Second Circuit dismissed on appeal on the ground that it was without jurisdiction, though expressing the view that a three-judge court should have been convened. 289 F. 2d 426. The appellee’s renewed request for a three-judge court was then denied by a district judge on the ground that previous District Court rulings in the litigation had established the “law of this case” and that the Court of Appeals’ statement that a three-judge court should have been convened was “dictum.” 194 F. Supp. 3. After granting certi-orari and a motion for leave to file a petition for a writ of mandamus, 368 U. S. 812, this Court, holding that a three-judge court should have been empaneled, remanded the case to the District Court “for expeditious action” to that end. 370 U. S. 713.
The court noted, for example: “The definition of sale in Section 3 (28) provides that ‘ “To sell” . . . shall include the delivery of any alcoholic beverage in the state.’ This, of course, is inapplicable to plaintiff’s sales. Whatever may be the purpose of Section 105 (2) in requiring that a retail liquor store have an entrance from the street level and be located dn a public thoroughfare, the requirements, which may be appropriate where liquor purchases are delivered directly to the customer, seem quite irrelevant to a concern which sells liquor exclusively for delivery in a foreign country.” 212 F. Supp., at 379.
Cf. Government Employees v. Windsor, 353 U. S. 364; American Federation of Labor v. Watson, 327 U. S. 582; Great Lakes Co. v. Huffman, 319 U. S. 293; Burford v. Sun Oil Co., 319 U. S. 315, 323-325; Chicago v. Fieldcrest Dairies, 316 U. S. 168.
See Louisiana P. & L. Co. v. Thibodaux City, 360 U. S. 25, 29, 31; Allegheny County v. Mashuda Co., 360 U. S. 185, 196-197.
The appellants have argued that Idlewild’s operations do not in fact conform to the various federal statutory and administrative standards under authority of which the operations are conducted. But there is no indication that the Bureau of Customs has ever questioned the regularity of Idlewild’s operations under the relevant federal law and regulations.
Likewise, in Mahoney v. Triner Corp., 304 U. S. 401, the Court held that the Equal Protection Clause is not applicable to imported intoxicating liquor. “A classification recognized by the Twenty-first Amendment cannot be deemed forbidden by the Fourteenth.” Id., at 404.
Quite independently of the Twenty-first Amendment, the Court has sustained a State’s power, within the confines of the Commerce Clause, to regulate and supervise the transportation of intoxicants through its territory. See Duckworth v. Arkansas, 314 U. S. 390; Carter v. Virginia, 321 U. S. 131. In Duckworth, Mr. Justice Jackson relied on the Twenty-first Amendment in concurring in the judgment. 314 U. S., at 397. In Carter, Mr. Justice Black, Mr. Justice Frankfurter, and Mr. Justice Jackson wrote separate concurrences, relying upon the Twenty-first Amendment. 321 U. S., at 138, 139. Cf. Gordon v. Texas, 355 U. S. 369, upholding a similar state statute in a per curiam citing both the Twenty-first Amendment and Carter v. Virginia, supra.
Prior to the Eighteenth Amendment, Congress passed laws giving the States a large degree of autonomy in regulating the importation and distribution of intoxicants. These laws, the Wilson Act and the Webb-Kenyon Act, are still in force. 27 U. S. C. §§ 121,122. In United States v. Gudger, 249 U. S. 373, the Court held that under the Reed amendment of 1917 — passed by Congress to strengthen these laws, 39 Stat. 1058, 1069 — a prohibition upon transportation “into” a State did not prohibit the “movement through one State as a mere incident of transportation to the [place] into which it is shipped.” Id., at 375.
See cases cited in note 10, supra.
Question: What is the basis of the Supreme Court's decision?
A. judicial review (national level)
B. judicial review (state level)
C. Supreme Court supervision of lower federal or state courts or original jurisdiction
D. statutory construction
E. interpretation of administrative regulation or rule, or executive order
F. diversity jurisdiction
G. federal common law
Answer:
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sc_respondent
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086
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the respondent of the case. The respondent is the party being sued or tried and is also known as the appellee. Characterize the respondent as the Court's opinion identifies them.
Identify the respondent by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the respondent is actually single entitiy or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single respondent, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
MAINE v. TAYLOR et al.
No. 85-62.
Argued March 24, 1986
Decided June 23, 1986
Blackmun, J., delivered the opinion of the Court, in which BURGER, C. J., and BREnnan, White, MARSHALL, Powell, Rehnquist, and 0’ConnOR, JJ., joined. Stevens, J., filed a dissenting opinion, post, p. 152.
Cabanne Howard, Deputy Attorney General of Maine, argued the cause for appellant. With him on the briefs was James E. Tierney, Attorney General.
Jerrold J. Ganzfried argued the cause for the United States, as appellee under this Court’s Rule 10.4, in support of appellant. With him on the brief were Solicitor General Fried, Assistant Attorney General Habicht, Deputy Solicitor General Wallace, Donald A. Carr, Dirk D. Snel, and Margaret A. Hill.
E. Paul Eggert argued the cause for appellee Taylor. With him on the brief was Robert Edmond Mittel.
Justice Blackmun
delivered the opinion of the Court.
Once again, a little fish has caused a commotion. See Hughes v. Oklahoma, 441 U. S. 322 (1979); TVA v. Hill, 437 U. S. 153 (1978); Cappaert v. United States, 426 U. S. 128 (1976). The fish in this case is the golden shiner, a species of minnow commonly used as live bait in sport fishing.
Appellee Robert J. Taylor (hereafter Taylor or appellee) operates a bait business in Maine. Despite a Maine statute prohibiting the importation of live baitfish, he arranged to have 158,000 live golden shiners delivered to him from outside the State. The shipment was intercepted, and a federal grand jury in the District of Maine indicted Taylor for violating and conspiring to violate the Lacey Act Amendments of 1981, 95 Stat. 1073, 16 U. S. C. §§3371-3378. Section 3(a)(2)(A) of those Amendments, 16 U. S. C. § 3372(a)(2)(A), makes it a federal crime “to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce . . . any fish or wildlife taken, possessed, transported, or sold in violation of any law or regulation of any State or in violation of any foreign law.”
Taylor moved to dismiss the indictment on the ground that Maine’s import ban unconstitutionally burdens interstate commerce and therefore may not form the basis for a federal prosecution under the Lacey Act. Maine, pursuant to 28 U. S. C. § 2403(b), intervened to defend the validity of its statute, arguing that the ban legitimately protects the State’s fisheries from parasites and nonnative species that might be included in shipments of live baitfish. The District Court found the statute constitutional and denied the motion to dismiss. United States v. Taylor, 585 F. Supp. 393 (Me. 1984). Taylor then entered a conditional plea of guilty pursuant to Federal Rule of Criminal Procedure 11(a)(2), reserving the right to appeal the District Court’s ruling on the constitutional question. The Court of Appeals for the First Circuit reversed, agreeing with Taylor that the underlying state statute impermissibly restricts interstate trade. United States v. Taylor, 752 F. 2d 757 (1985). Maine appealed. We set the case for plenary review and postponed consideration of Taylor’s challenges to our appellate jurisdiction. 474 U. S. 943 (1985).
I
Maine invokes our jurisdiction under 28 U. S. C. §1254(2), which authorizes an appeal as of right to this Court “by a party relying on a State statute held by a court of appeals to be invalid as repugnant to the Constitution, treaties or laws of the United States.” Appellee, however, contends that this provision applies only to civil cases, and that, in any event, Maine lacks standing to appeal the reversal of a federal conviction. These contentions both relate to the unusual procedural posture of the case: an appeal by a State from the reversal of a federal conviction based on a violation of state law. We consider them in turn.
First, despite its procedural peculiarities, this case fits squarely within the plain terms of § 1254(2): Maine relies on a state statute that the Court of Appeals held to be unconstitutional. Although statutes authorizing appeals as of right to this Court are strictly construed, see, e. g., Silkwood v. Kerr-McGee Corp., 464 U. S. 238, 247 (1984), nothing in the language or legislative history of §1254(2) suggests that its scope is limited to civil litigation. In arguing for such a limitation, appellee relies principally on the fact that §§1254(1) and (3) — which authorize discretionary review of cases from the Courts of Appeals by writ of certiorari and certification, respectively — both apply explicitly to “any civil or criminal case.” Since this express language is absent from § 1254(2), appellee contends that Congress must have intended this Court’s appellate jurisdiction over cases from the courts of appeals to remain limited to civil cases, as indeed it was limited prior to the 1925 enactment of § 1254’s predecessor.
We find the argument unconvincing. While some statutes governing this Court’s jurisdiction, such as §§ 1254(1) and (3), expressly apply to both civil and criminal cases, others are explicitly limited to civil actions. See, e. g., 28 U. S. C. §§ 1252 and 1253. The absence of either sort of provision from § 1254(2) hardly demonstrates that Congress had only civil cases in mind, and we see no reason to read such a limitation into the straightforward and unambiguous terms of the statute. This is not a situation where “the sense of the statute and the literal language are at loggerheads,” or where adherence to the plain terms of the statute “ ‘would confer upon this Court a jurisdiction beyond what “naturally and properly belongs to it.’”” Heckler v. Edwards, 465 U. S. 870, 879 (1984), quoting Florida Lime & Avocado Growers, Inc. v. Jacobsen, 362 U. S. 73, 94 (1960) (Frankfurter, J., dissenting), in turn quoting American Security & Trust Co. v. District of Columbia, 224 U. S. 491, 495 (1912). Section 1254(2) serves to ensure that a state statute is struck down by the federal judiciary only when it is found invalid by this Court, or when the parties acquiesce in the decision of a lower federal court. Federal nullification of a state statute is a grave matter whether it occurs in civil litigation or in the course of a criminal prosecution, and review by this Court is particularly warranted in either event.
Appellee’s second jurisdictional argument is based on the fact that the only appellant before this Court is the State of Maine — only an intervenor in the District Court — not the United States, which brought the original prosecution. Since the United States and its attorneys have the sole power to prosecute criminal cases in the federal courts, appellee contends that Maine may not seek review of the Court of Appeals’ reversal of his conviction. By statute, however, Maine intervened with “all the rights of a party,” 28 U. S. C. § 2403(b), and appeals may be taken to this Court under §1254(2) by any “party relying on a State statute” held invalid under federal law by a Court of Appeals. We previously have recognized that intervenors in lower federal courts may seek review in this Court on their own, so long as they have “a sufficient stake in the outcome of the controversy” to satisfy the constitutional requirement of genuine adversity. Bryant v. Yellen, 447 U. S. 352, 368 (1980); see also, e. g., Diamond v. Charles, 476 U. S. 54, 68 (1986). Maine’s stake in the outcome of this litigation is substantial: if the judgment of the Court of Appeals is left undisturbed, the State will be bound by the conclusive adjudication that its import ban is unconstitutional. See, e. g., Stoll v. Gottlieb, 305 U. S. 165 (1938). And although private parties, and perhaps even separate sovereigns, have no legally cognizable interest in the prosecutorial decisions of the Federal Government, cf., e. g., Diamond v. Charles, supra, at 64-65; Linda R. S. v. Richard D., 410 U. S. 614, 619 (1973), a State clearly has a legitimate interest in the continued enforceability of its own statutes, see Diamond v. Charles, supra, at 65; Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U. S. 592, 601 (1982). Furthermore, because reversal of the judgment of the Court of Appeals would result in the automatic reinstatement of appellee’s guilty plea, the controversy before us clearly remains live notwithstanding the Federal Government’s decision to abandon its own appeal. We turn to the merits.
II
The Commerce Clause of the Constitution grants Congress the power “[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Art. I, §8, cl. 3. “Although the Clause thus speaks in terms of powers bestowed upon Congress, the Court long has recognized that it also limits the power of the States to erect barriers against interstate trade.” Lewis v. BT Investment Managers, Inc., 447 U. S. 27, 35 (1980). Maine’s statute restricts interstate trade in the most direct manner possible, blocking all inward shipments of live baitfish at the State’s border. Still, as both the District Court and the Court of Appeals recognized, this fact alone does not render the law unconstitutional. The limitation imposed by the Commerce Clause on state regulatory power “is by no means absolute,” and “the States retain authority under their general police powers to regulate matters of ‘legitimate local concern,’ even though interstate commerce may be affected.” Id., at 36.
In determining whether a State has overstepped its role in regulating interstate commerce, this Court has distinguished between state statutes that burden interstate transactions only incidentally, and those that affirmatively discriminate against such transactions. While statutes in the first group violate the Commerce Clause only if the burdens they impose on interstate trade are “clearly excessive in relation to the putative local benefits,” Pike v. Bruce Church, Inc., 397 U. S. 137, 142 (1970), statutes in the second group are subject to more demanding scrutiny. The Court explained in Hughes v. Oklahoma, 441 U. S., at 336, that once a state law is shown to discriminate against interstate commerce “either on its face or in practical effect,” the burden falls on the State to demonstrate both that the statute “serves a legitimate local purpose,” and that this purpose could not be served as well by available nondiscriminatory means. See also, e. g., Sporhase v. Nebraska ex rel. Douglas, 458 U. S. 941, 957 (1982); Hunt v. Washington State Apple Advertising Comm’n, 432 U. S. 333, 353 (1977); Dean Milk Co. v. Madison, 340 U. S. 349, 354 (1951).
The District Court and the Court of Appeals both reasoned correctly that, since Maine’s import ban discriminates on its face against interstate trade, it should be subject to the strict requirements of Hughes v. Oklahoma, notwithstanding Maine’s argument that those requirements were waived by the Lacey Act Amendments of 1981. It is well established that Congress may authorize the States to engage in regulation that the Commerce Clause would otherwise forbid. See, e. g., Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 769 (1945). But because of the important role the Commerce Clause plays in protecting the free flow of interstate trade, this Court has exempted state statutes from the implied limitations of the Clause only when the congressional direction to do so has been “unmistakably clear.” South-Central Timber Development, Inc. v. Wunnicke, 467 U. S. 82, 91 (1984). The 1981 Amendments of the Lacey Act clearly provide for federal enforcement of valid state and foreign wildlife laws, but Maine identifies nothing in the text or legislative history of the Amendments that suggests Congress wished to validate state laws that would be unconstitutional without federal approval.
Before this Court, Maine concedes that the Lacey Act Amendments do not exempt state wildlife legislation from scrutiny under the Commerce Clause. See Reply Brief for Appellant 3, n. 2. The State insists, however, that the Amendments should lower the intensity of the scrutiny that would otherwise be applied. We do not agree. An unambiguous indication of congressional intent is required before a federal statute will be read to authorize otherwise invalid state legislation, regardless of whether the purported authorization takes the form of a flat exemption from Commerce Clause scrutiny or the less direct form of a reduction in the level of scrutiny. Absent “a clear expression of approval by Congress,” any relaxation in the restrictions on state power otherwise imposed by the Commerce Clause unacceptably increases “the risk that unrepresented interests will be adversely affected by restraints on commerce.” South-Central Timber, supra, at 92.
In this case, there simply is no unambiguous statement of any congressional intent whatsoever “to alter the limits of state power otherwise imposed by the Commerce Clause,” United States v. Public Utilities Comm’n of California, 345 U. S. 295, 304 (1953). In arguing to the contrary, Maine relies almost exclusively on the following findings in the Senate Report on the Lacey Act Amendments:
“It is desirable to extend protection to species of wildlife not now covered by the Lacey Act, and to plants which are presently not covered at all. States and foreign government are encouraged to protect a broad variety of species. Legal mechanisms should be supportive of those governments.” S. Rep. No. 97-123, pp. 3-4 (1981).
Maine reads this passage, particularly the last sentence, to direct federal courts to treat state wildlife laws more leniently. We find this interpretation not only less than obvious but positively strained; by far the more natural reading of the last sentence is that it refers only to the availability of federal investigative and prosecutorial resources to enforce valid state wildlife laws. The passage certainly does not make “unmistakably clear” that Congress intended in 1981 to alter in any way the level of Commerce Clause scrutiny applied to those laws. Maine’s ban on the importation of live baitfish thus is constitutional only if it satisfies the requirements ordinarily applied under Hughes v. Oklahoma to local regulation that discriminates against interstate trade: the statute must serve a legitimate local purpose, and the purpose must be one that cannot be served as well by available nondiscriminatory means.
Ill
The District Court found after an evidentiary hearing that both parts of the Hughes test were satisfied, but the Court of Appeals disagreed. We conclude that the Court of Appeals erred in setting aside the findings of the District Court. To explain why, we need to discuss the proceedings below in some detail.
A
The evidentiary hearing on which the District Court based its conclusions was one before a Magistrate. Three scientific experts testified for the prosecution and one for the defense. The prosecution experts testified that live baitfish imported into the State posed two significant threats to Maine’s unique and fragile fisheries. First, Maine’s population of wild fish — including its own indigenous golden shiners — would be placed at risk by three types of parasites prevalent in out-of-state baitfish, but not common to wild fish in Maine. See, e. g., App. 39-55. Second, nonnative species inadvertently included in shipments of live baitfish could disturb Maine’s aquatic ecology to an unpredictable extent by competing with native fish for food or habitat, by preying on native species, or by disrupting the environment in more subtle ways. See, e. g., id., at 59-70, 141-149.
The prosecution experts further testified that there was no satisfactory way to inspect shipments of live baitfish for parasites or commingled species. According to their testimony, the small size of baitfish and the large quantities in which they are shipped made inspection for commingled species “a physical impossibility.” Id., at 81. Parasite inspection posed a separate set of difficulties because the examination procedure required destruction of the fish. Id., at 81-82, 195. Although statistical sampling and inspection techniques had been developed for salmonids (i. e., salmon and trout), so that a shipment could be certified parasite-free based on a standardized examination of only some of the fish, no scientifically accepted procedures of this sort were available for baitfish. See, e. g., id., at 71, 184, 193-194.
Appellee’s expert denied that any scientific justification supported Maine’s total ban on the importation of baitfish. Id., at 241. He testified that none of the three parasites discussed by the prosecution witnesses posed any significant threat to fish in the wild, id., at 206-212, 228-232, and that sampling techniques had not been developed for baitfish precisely because there was no need for them. Id., at 265-266. He further testified that professional baitfish farmers raise their fish in ponds that have been freshly drained to ensure that no other species is inadvertently collected. Id., at 239-240.
Weighing all the testimony, the Magistrate concluded that both prongs of the Hughes test were satisfied, and accordingly that appellee’s motion to dismiss the indictment should be denied. Appellee filed objections, but the District Court, after an independent review of the evidence, reached the same conclusions. First, the court found that Maine “clearly has a legitimate and substantial purpose in prohibiting the importation of live bait fish,” because “substantial uncertainties” surrounded the effects that baitfish parasites would have on the State’s unique population of wild fish, and the consequences of introducing nonnative species were similarly unpredictable. 585 F. Supp., at 397. Second, the court concluded that less discriminatory means of protecting against these threats were currently unavailable, and that, in particular, testing procedures for baitfish parasites had not yet been devised. Id., at 398. Even if procedures of this sort could be effective, the court found that their development probably would take a considerable amount of time. Id., at 398, n. 11.
Although the Court of Appeals did not expressly set aside the District Court’s finding of a legitimate local purpose, it noted that several factors “cast doubt” on that finding. 752 F. 2d, at 762. First, Maine was apparently the only State to bar all importation of live baitfish. See id., at 761. Second, Maine accepted interstate shipments of other freshwater fish, subject to an inspection requirement. Third, “an aura of economic protectionism” surrounded statements made in 1981 by the Maine Department of Inland Fisheries and Wildlife in opposition to a proposal by appellee himself
Question: Who is the respondent of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
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sc_respondent
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077
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the respondent of the case. The respondent is the party being sued or tried and is also known as the appellee. Characterize the respondent as the Court's opinion identifies them.
Identify the respondent by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the respondent is actually single entitiy or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single respondent, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
PANHANDLE EASTERN PIPE LINE CO. v. MICHIGAN PUBLIC SERVICE COMMISSION et al.
No. 486.
Argued, April 23, 1951.
Decided May 14, 1951.
Robert P. Patterson argued the cause for appellant. With him on the brief was Clayton F. Jennings.
Edmund E. Shepherd, Solicitor General of Michigan, argued the cause for the Michigan Public Service Commission, appellee. With him on the brief were Frank C. Millard, Attorney General, Daniel J. O’Hara and Charles M. A. Martin, Assistant Attorneys General. Stephen J. Roth, then Attorney General, was also of counsel.
Donald R. Richberg argued the cause for the Michigan Consolidated Gas Co., appellee. With him on the brief were Clifton G. Dyer and James W. Williams. •
Solicitor General Perlman, Robert L. Stern, Bradford Ross and Bernard A. Foster, Jr. filed a memorandum for the Federal Power Commission, as amicus curiae.
Me. Justice Minton
delivered the opinion of the Court.
This is an appeal from the affirmance of an order of the Michigan Public Service Commission requiring appellant to obtain a certificate of public convenience and necessity before selling natural gas direct to industrial consumers in a municipality already served by a public utility.
Appellant is engaged in the transportation of natural gas by pipe line from fields in Texas, Oklahoma and Kansas into areas which include the State of Michigan. Appellant is a “natural-gas company” within the coverage of the Natural Gas Act, 52 Stat. 821, 15 U. S. C. §§ 717 et seg., and subject thereunder to regulation by the Federal Power Commission. Appellee Michigan Consolidated Gas Company is a public utility of Michigan which under appropriate authorization distributes gas to domestic, commercial and industrial consumers in and around Detroit. Consolidated obtains its entire supply of natural gas for distribution in the Detroit district from appellant.
In 1945 appellant publicly announced a program of securing large industrial customers for the direct sale of natural gas in Michigan. In Detroit it offered to pay the City for the right to lay and operate its pipe line along the streets and alleys directly to large industrial customers. In October of that year appellant succeeded in securing a large direct-sale contract with the Ford Motor Company for gas at its Dearborn plant, located in the Detroit district. Ford was already purchasing substantial quantities of gas for industrial use at the Dearborn plant from Consolidated.
Believing its interests and those of its customers were prejudiced by appellant’s program, particularly the Ford contract, Consolidated filed a complaint with the Michigan Public Service Commission. Appellant appeared to contest the jurisdiction of the Commission over such sales. After hearing, the Commission ordered appellant to—
“cease and desist from making direct sales and deliveries of natural gas to industries within the State of Michigan, located within municipalities already being served by a public utility, until such time as it shall have first obtained a certificate of public convenience and necessity from this Commission to perform such services.”
Appellant obtained an injunction against the order of the Commission in the Circuit Court of Ingham County, Michigan. The Circuit Court held that the order was a prohibition of interstate commerce and therefore invalid. The Supreme Court of Michigan, three judges dissenting, reversed the Circuit Court and affirmed the Commission’s order. 328 Mich. 650, 44 N. W. 2d 324. That court rejected the argument that the order of the Commission was an absolute denial of the right of appellant to sell natural gas in Michigan direct to consumers. Since appellant was free to make application to the Michigan Commission for a certificate of public convenience and necessity as to such sales, the order was construed as denying the right of appellant to sell direct without first obtaining such certificate. The court held this requirement to be within the State’s regulatory authority despite the interstate character of the sales. This appeal challenges the correctness of that decision.
The sale to industrial consumers as proposed by appellant is clearly interstate commerce. Panhandle Pipe Line Co. v. Public Service Comm’n of Indiana, 332 U. S. 507, 513; Pennsylvania Gas Co. v. Commission, 252 U. S. 23, 28. But the sale and distribution of gas to local consumers made by one engaged in interstate commerce is “essentially local” in aspect and is subject to state regulation without infringement of the Commerce Clause of the Federal Constitution. In the absence of federal regulation, state regulation is required in the public interest. Pennsylvania Gas Co. v. Commission, supra, at 31. See also opinion of Cardozo, J., in Pennsylvania Gas Co. v. Commission, 225 N. Y. 397, 122 N. E. 260. These principles apply to direct sales for industrial consumption as well as to sales for domestic and commercial uses. Panhandle-Indiana, supra, at 514, 519-520.
The facts in the instant case show that the proposed sales are primarily of local interest. They emphasize the need for local regulation and the wisdom of the principles just discussed. To accommodate its operations, appellant proposes to use the streets and alleys of Detroit and environs. A local utility already operating in the same area, Consolidated, receives its entire supply of natural gas from appellant. A substantial portion of Consolidated’s revenues is derived from sales to large industrial consumers. Appellant ignored requests of Consolidated for additional gas to meet the increased wants of its industrial customers. Instead of attempting to meet increased needs through Consolidated, appellant launched a program to secure for itself large industrial accounts from customers, some of whom were already being served by Consolidated. In connection with the Ford Motor Company, it is noteworthy that the tap line by which appellant proposed to serve Ford directly would be substantially parallel to and only a short distance from the existing tap line by which Consolidated now serves Ford.
Thus, not only would there be two utilities using local facilities to accommodate their distribution systems, but they would be seeking to serve the same industrial consumers. Appellant asserts a right to compete for the cream of the volume business without regard to the local public convenience or necessity. Were appellant successful in this venture, it would no doubt be reflected adversely in Consolidated’s over-all' costs of service and its rates to customers whose only source of supply is Consolidated. This clearly presents a situation of “essentially local” concern and of vital interest to the State of Michigan.
Of course, when Congress acts in this field it is supreme. It has acted. Section 1 (b) of the Natural Gas Act, supra, provides as follows:
“The provisions of this Act shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.”
By this Act Congress occupied only a part of the field. As to sales, only the sale of gas in interstate commerce for resale was covered. Direct sales for consumptive use were designedly left to state regulation. Panhandle-Indiana, 332 U. S. at 516-518. Speaking further of the division of regulatory authority over interstate commerce in natural gas, this Court said in the same case:
“It would be an exceedingly incongruous result if a statute so motivated, designed and shaped to bring about more effective regulation, and particularly more effective state regulation, were construed in the teeth of those objects, and the import of its wording as well, to cut down regulatory power and to do so in a manner making the states less capable of regulation than before the statute’s adoption. Yet this, in effect, is what appellant asks us to do. For the essence of its position, apart from standing directly on the commerce clause, is that Congress by enacting the Natural Gas Act has ‘occupied the field,’ i e., the entire field open to federal regulation, and thus has relieved its direct industrial sales of any subordination to state control.
“The exact opposite is the fact. Congress, it is true, occupied a field. But it was meticulous to take in only territory which this Court had held the states could not reach. That area did not include direct consumer sales, whether for industrial or other uses. Those sales had been regulated by the states and the regulation had been repeatedly sustained. In no instance reaching this Court had it been stricken down.
“The Natural Gas Act created an articulate legislative program based on a clear recognition of the respective responsibilities of the federal and state regulatory agencies. It does not contemplate ineffective regulation at either level. We have emphasized repeatedly that Congress meant to create a comprehensive and effective regulatory scheme, complementary in its operation to those of the states and in no manner usurping their authority. . . . And, as was pointed out in Power Comm’n v. Hope Gas Co., [320 U. S. 591] at 610, ‘the primary aim of this legislation was to protect consumers against exploitation at the hands of natural gas companies.’ The scheme was one of cooperative action between federal and state agencies. It could accomplish neither that protective aim nor the comprehensive and effective dual regulation Congress had in mind, if those companies could divert at will all or the cream of their business to unregulated industrial uses.” 332 U. S. at 519, 520-521.
The statutory scheme of “dual regulation” might have some overlaps or conflicts but no such exigencies appear here. There are no opposing directives and hence no necessity for us to resolve any conflicting claims as between state and federal regulation.
Appellant concedes, as it must, that direct sales by it to industrial consumers are subject to state rate regulation under the Panhandle-Indiana decision. It contends, however, that that decision does not comprehend its problem, reasoning that the jurisdiction here asserted by the Michigan Commission is the power to prohibit interstate commerce in natural gas.
Although the end result might be prohibition of particular direct sales, to require appellant to secure a certificate of public convenience and necessity before it may enter a municipality already served by a public utility is regulation, not absolute prohibition. There is no intimation that appellant cannot deliver and sell available gas to Consolidated for resale to customers who have additional gas requirements. It is no discrimination against interstate commerce for Michigan to require appellant to route its sales of gas through the existing certificated utility where the public convenience and necessity would not be served by direct sales. That there is neither discrimination nor prohibition here saves this regulation from the rule of such cases as Hood & Sons v. Du Mond, 336 U. S. 525, relied on by appellant, where a state was said to have discriminated against interstate commerce by prohibiting it because it would subject local business to competition. And the statute under which the Michigan Commission acted does not distinguish between an interstate or intrastate agency desiring to operate in a locality already served by a utility. See Cities Service Co. v. Peerless Co., 340 U. S. 179, 188.
It does not follow that because appellant is engaged in interstate commerce it is free from state regulation or free to manage essentially local aspects of its business as it pleases. The course of this Court’s decisions recognizes no such license. See Cities Service case, supra; Panhandle-Indiana case, supra; Pennsylvania Gas Co. v. Commission, 252 U. S. 23. Such a course would not accomplish the effective dual regulation Congress intended, and would permit appellant to prejudice substantial local interests. This is not compelled by the Natural Gas Act or the Commerce Clause of the Constitution.
Judgment affirmed.
The Commission acted under authority of Mich. Comp. Laws, 1948, § 460.502, which provides:
“Sec. 2. No public utility shall hereafter begin the construction or operation of any public utility plant or system thereof nor shall it render any service for the purpose of transacting or carrying on a local business either directly, or indirectly, by serving any other utility or agency so engaged in such local business, in any municipality in this state where any other utility or agency is then engaged in such local business and rendering the same sort of service, or where such municipality is receiving service of the same sort, until such public utility shall first obtain from the commission a certificate that public convenience and necessity requires or will require such construction, operation, service, or extension.”
Other relevant sections of the Michigan statute provide:
“Sec. 3. Before any such certificate of convenience and necessity shall issue, the applicant therefor shall file a petition with the commission stating the name of the municipality or municipalities which it desires to serve and the kind of service which it proposes to render, and that the applicant has secured the necessary consent or franchise from such municipality or municipalities authorizing it to transact a local business.” § 460.503.
“Sec. 5. In determining the question of public convenience and necessity the commission shall take into consideration the service being rendered by the utility then serving such territory, the investment in such utility, the benefit, if any, to the public in the matter of rates and such other matters as shall be proper and equitable in determining whether or not public convenience and necessity requires the applying utility to serve the territory. ...” § 460.505.
See note 1, supra.
Question: Who is the respondent of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
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What follows is an opinion from a United States Court of Appeals. The issue is: "Did the court conclude that the jury instructions were improper?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed". If the court answered the question in the affirmative, but the error articulated by the court was judged to be harmless, answer "Yes, but error was harmless".
NORFOLK STATIONERY CO., Inc., v. ROYSTER INV. CORPORATION. In re WINDSOR SURF & GOLF CLUB, Inc.
Circuit Court of Appeals, Fourth Circuit.
January 10, 1928.
No. 2649.
1. Bankruptcy <@=>340(4) — Evidence held to show office equipment was purchased and offices le'ased for bankrupt by agent, and conditional seller’s knowledge thereof.
On issue whether rent due from bankrupt took precedence over unpaid balance of purchase pi-ice of office equipment due under conditional sale contract, evidence held to show that individual, who in his own name purchased office equipment and leased office space, acted as agent for bankrupt corporation, to which he subsequently transferred the personal property and lease, and also showed seller’s knowledge of the transfer.
2. Bankruptcy <@=>350 — Landlord’s lien held entitled to precedence over claim for price of articles delivered under conditional safe contract more than five days before its filing (Code Va. 1919, § 5189, as amended).
Under Code Ya. 1919, § 5189, as amended by Acts Ex. Sess. 1919, c. 26, Acts 1920, c. 280, Acts 1922, c. 49, and Acts Ex. Sess. 1923, c. 159, providing that sale of goods reserving title or lien in seller to secure payment is void as to buyer’s creditors or purchasers for value without notice, unless contract is filed within five days from delivery of goods, landlord’s lien for rent took precedence over conditional seller’s claim for unpaid purchase price as to all articles of office equipment delivered to bankrupt buyer more than five days prior to filing of the contract, as against seller’s contention that it had five days after delivery of last article under the conditional sale contract within which to record its reservation of title, and that such recordation protected all articles delivered under the contract, regardless of time of delivery.
Appeal from the District Court of the United States for the Eastern District of Virginia, at Norfolk, in Bankruptcy; D. Lawrence’ Groner, Judge.
In the matter of the Windsor Surf & Golf Club, Incorporated, bankrupt. From a decree giving precedence to the claim of the Royster Investment Corporation, the Norfolk Stationery Company, Incorporated, appeals.
Affirmed.
E. A. Bilisoly, of Norfolk, Va., for appellant.
Cadwallader J. Collins, of Norfolk, Va., for appellee.
Before WADDILL, PARKER, and NORTHCOTT, Circuit Judges.
WADDILL, Circuit Judge.
This is an appeal from a decree of the United States District Court for the Eastern District of Virginia, of June 21, 1927, entered in the matter of the Windsor Surf & Golf Club, Incorporated, bankrupt, in bankruptcy, and involves the question of whether the proceeds of the sale by the court’s receiver of certain of the assets in bankruptcy should be first subjected to the payment of a lien for rent in favor of appellee corporation for $733.32, in preference to the claim of the appellant for unpaid purchase money for the property sold claimed under a vendor’s lien.
The facts in the case are briefly these:
On the 1st of October, 1926, the appellant company entered into a contract with one Thomas H. Berry, then of the city of Norfolk, to sell him certain property enumerated in the contract at the price of $2,300, $100 to be paid in cash, and the residue of $2,200 • to be paid in twelve monthly installments of $183.33 each. Title was to be retained by vendor until all the purchase money was paid. On the 3d day of September, 1926, the appellee, Royster Investment Corporation, leased to said Berry certain rooms, numbered 1228, 1230, 1232, and 1234, in the twelve-story Royster Building, located at the northwest corner of Granby street and City Hall avenue, Norfolk, Va., for a term of 15 months, beginning on the 1st of October, 1926, at $2,749.95, payable in monthly installments on the 1st of each month. The twelfth provision of said lease was as follows:
“Twelfth. It is understood and agreed that the lessee is extended the privilege of transferring this lease to the Windsor Surf & Golf Club, Incorporated, from the date of its incorporation.”
Subsequently, and as contemplated by said section 12, Berry assigned to the Windsor Surf & Golf Club, the bankrupt corporation, said lease, which was accepted by the bankrupt company on the 1st of October, 1926, and the purchase money charged up as a liability of the corporation, and the acquired personal effects treated as an asset thereof. The rooms thus leased in the Royster Building were used as the offices of the bankrupt corporation, the name of the company being printed on the doors thereof.
On the 17th of March, 1927, the Windsor Surf & Golf Club was duly adjudged a bankrupt, and the said personal property, consisting of furniture and fixtures located in the rooms in the Royster Building listed as assets, and the debt scheduled as a liability. While it does not appear that the appellant corporation was formally notified of the transfer .of the lease from the appellee company to the bankrupt company, and the transfer of the property purchased from it by Berry, still the trial court hold, and we think correctly, that Berry took the lease and purchased the property in his own name as agent for the gulf club, as the twelfth clause in the lease contemplated, and that the appellant company, with the name of the bankrupt firm upon the doors of the offices in which the property was placed and used, with the furniture carried on the books of the club as an asset, and debited as a liability, and the money for the lease being paid by the bankrupt company, necessarily had knowledge of the transfer to the bankrupt company.
The eoiirt further held that the proceeds of the sale of the property of the bankrupt company found in its offices, at the time of the bankruptcy, save those arising from the sale of an iron safe placed upon the premises on the day of the recordation of the contract reserving title, was liable for the arrearages in rent due thereunder, to wit, $733.-32.
This raises the question whether the rent due took precedence over the unpaid balance of purchase money under the contract of sale as presented by the assignments of error. The correct solution thereof depends upon the interpretation to be placed upon the Virginia statute, section 5189 of the Code of Virginia of 1919, as amended by Acts of 1919 (Ex. Sess. c. 26), 1920 (chapter 280), 1922 (chapter 49), and 1923 (Ex. Sess. c. 159). This pertinent section, as amended, is as follows:
“Beservation of Title to, and Liens on, Goods and Chattels Sold to be Void as to Creditors, and Purchasers for Value, Unless m Writing and Docketed. Every sale, or contract for the sale of goods and chattels, wherein the title thereto, or a lien thereon, is reserved, until the same be paid for, in whole or in part, or the transfer of title is made to depend on any condition, where possession is delivered to the vendee, shall, in respect to such reservation and condition be void as to creditors of the vendee who acquire a lien upon the goods and as to purchasers from the vendee, for value, without notice, from such vendee unless such sale or contract be'evidenced by writing, signed by the vendor and the vendee, setting forth the date thereof, the amount due, when and how payable, a brief description of the goods and chattels, and the terms of the reservation or condition; and unless said writing is filed for docketing with the Clerk of the county or corporation, where deeds are admitted to record, as provided by law, in which said goods and chattels may be; provided, that if such filing for docketing be done within five days from the delivery of the goods and chattels to the vendee, it shall be as valid as to creditors and purchasers as if such filing for docketing had been done on the day of such delivery of the goods and chattels. * * *»
The statute clearly provides for the reservation of title by vendors of personal property in Virginia. There appears to be no contest between the parties as to the existence of a lien for rent in favor of landlords such as is claimed in this case, and only the right to the particular lien and the order of priority are involved. The conditional sales contract covering this property was dated October 1, 1926, and, with the exception of the last article of property mentioned, to wit, the iron safe, the same was duly delivered, though for the convenience of the parties some articles were subsequently temporarily changed. No recordation of the contract of sale and reservation of title was made until a subsequent date, to wit, .December 9, 1926, and on this last-mentioned date the ii'on safe in question was delivered.
Appellant earnestly insists that the true intent and meaning of the Virginia statute is that it had five days after the delivery of the last article covered by its conditional sales contract within which to record its reservation of title; that the contract was one of entirety, and indivisible as respects the several articles covered thereby; and that the benefit of the lien in favor of the vendor and of the recordation of title remained and continued until five days subsequent to the delivery of the last article thereunder.
After much consideration, we cannot take this view of the statute. On the contrary, it is the very reverse of what was intended by the Legislature in its enactment. Such an interpretation would destroy the real benefits designed to be accomplished by the statute, namely, that vendors seeking to reserve the title to property sold and delivered to vendee should do so by appropriate instrument in writing, but that thereafter, in order that sales might not be consummated as against creditors of, and purchasers from vendees, such instrument should be docketed and recorded in the clerk’s office of the county, or corporation where such goods and chattels might be, and the statute in terms provided for the recordation of such reservation of title within five days of the delivery of the goods and chattels. The Virginia statute, in authorizing the perfecting of a lien by the recordation of the conditional sales contract within five days after the delivery of the goods and chattels covered thereby, clearly indicated the purpose of the Legislature not to leave the matter of securing a lien thereunder open and uncertain, even as to the amount thereof, as would be the result of ■ adopting the view contended for. To do this would destroy the very purpose and effect sought to be obtained by the statute, and would result in the same being used as a cloak for fraudulent transactions, instead of insuring the desirable end which it was enacted'to secure. There would seem to be no reason why a contract of this sort should not be recorded on the day of its execution and delivery; and the same would be good as tó property then delivered or delivered within five days thereafter. The result in this case would he to insure to the appellee the payment of its rent claim of $733.32, assuming the proceeds of the sale of the articles in the office of the bankrupt corporation, other than the safe, to be that much, and the vendor, the appellant herein, the proceeds of the sale of the safe.
We have given careful consideration to the following authorities cited by appellant in support of its views: R. H. Thomas Co. v. Lewis Hubbard & Co. et al., 79 W. Ya. 138, 90 S. E. 816; Regent Waist Co. v. Morrison, etc., 88 W. Va. 303, 106 S. E. 712; In re G-osch (Berlin Machine Works v. Hilton & Dodge Lumber Co.) (C. C. A.) 126 F. 627; Boston Ice Co. v. Potter, 123 Mass. 28, 25 Am. Rep. 9; Williston on Sales) §§ 94 and 277 — as we have also to the able argument submitted by counsel in its behalf. Our opinion is that the authorities cited do not, under the facts and circumstances of this ease, warrant a conclusion other, than that which we have reached, nor are we persuaded of. the soundness of the views presented by counsel for appellant. The decision of the lower court is, in our opinion, plainly right, and is hereby affirmed, ■.with costs.
Affirmed.
Question: Did the court conclude that the jury instructions were improper?
A. No
B. Yes
C. Yes, but error was harmless
D. Mixed answer
E. Issue not discussed
Answer:
|
songer_dissent
|
0
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the number of judges who dissented from the majority (either with or without opinion). Judges who dissented in part and concurred in part are counted as dissenting.
Harry L. CUMBERLAND, Appellant, v. WARDEN, MARYLAND PENITENTIARY, Appellee.
No. 7026.
United States Court of Appeals Fourth Circuit.
Argued Nov. 7, 1955.
Decided Nov. 9, 1955.
Harry L. Cumberland, pro se, on brief. James H. Norris, Jr., Sp. Asst. Atty. Gen., of Maryland (C. Ferdinand Sybert, Atty. Gen., of Maryland, on brief), for appellee.
Before PARKER, Chief Judge, DO-BIE, Circuit Judge, and BARKSDALE, District Judge.
PER CURIAM.
This is an appeal from an order denying a petition for a writ of habeas corpus by a prisoner who is held in custody under the judgment of a Maryland State Court. The appeal must be dismissed for lack of the certificate of probable cause required by 28 U.S.C. § 2253. In addition, it is perfectly clear that the appeal is entirely without merit. The questions which appellant sought to raise by the writ of habeas corpus have been passed upon by the Court of Appeals of Maryland in denying to appellant leave to appeal from denial of habeas corpus by a Maryland state judge. Cumberland v. Warden, 205 Md. 646, 109 A.2d 66, 67, certiorari denied 348 U.S. 929, 75 S.Ct. 344. In that case the court said:
“We have repeatedly held that after trial and conviction the legality of arrest cannot be inquired into upon habeas corpus. Spence v. Warden, 204 Md. 661, 103 A.2d 345. Nor can the extent or legality of his initial detention. Bowie v. Warden, 190 Md. 728, 60 A.2d 185; Taylor v. Warden, 201 Md. 656, 92 A.2d 757; Fisher v. Swenson, 192 Md. 717, 64 A.2d 124. He admits that counsel was appointed to defend him, and there is no allegation that he complained to the court as to the conduct or competency of the counsel appointed. Gillum v. Warden, 200 Md. 656, 90 A.2d 173; Thanos v. Superintendent, 204 Md. 665, 104 A.2d 926. Nor is there any allegation that he objected to the pleas of guilty entered by his counsel. Counsel, of course, had a right to speak for the accused both in the matter of jury trial and plea of guilty. Ahern v. Warden, 203 Md. 672, 100 A.2d 645; Adkins v. Warden, 196 Md. 652, 75 A.2d 772; State ex rel. Freeland v. Warden, 193 Md. 696, 65 A.2d 886; Battle v. Warden, 190 Md. 720, 60 A.2d 182. If the defendant acquiesces, the point could not be raised even on direct appeal where the scope of review is far wider. Banks v. State, 203 Md. 488, 497, 102 A.2d 267; Rose v. State, 177 Md. 577, 581, 10 A.2d 617. Of course, if the plea of guilty was entered without objection in the presence of the accused, as we must assume, there was no occasion for the State to produce witnesses to prove the charges. Lockman v. Warden, 203 Md. 657, 99 A.2d 721; State ex rel. Jordan v. Warden, 191 Md. 753, 59 A.2d 778.”
Where the questions which appellant sought to raise had been adequately considered and properly passed upon by the state courts, appellant was not entitled, as a matter of right, to raise them by habeas corpus in the federal court. Brown v. Allen, 344 U.S. 443, 460-465, 73 S.Ct. 397, 97 L.Ed. 469.
Appeal dismissed.
Question: What is the number of judges who dissented from the majority?
Answer:
|
sc_respondent
|
055
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the respondent of the case. The respondent is the party being sued or tried and is also known as the appellee. Characterize the respondent as the Court's opinion identifies them.
Identify the respondent by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the respondent is actually single entitiy or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single respondent, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
UNITED STATES et al. v. BEAN
No. 01-704.
Argued October 16, 2002
Decided December 10, 2002
Thomas, J., delivered the opinion for a unanimous Court.
Deputy Solicitor General Kneedler argued the cause for petitioners. With him on the briefs were Solicitor General Olson, Assistant Attorney General McCallum, Irving L. Gornstein, Mark B. Stern, and Thomas M. Bondy.
Thomas C. Goldstein argued the cause for respondent. With him on the brief were Larry C. Hunter and Amy Howe.
Craig Goldblatt and Mathew S. Nosanchuk filed a brief for the Violence Policy Center as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for the Law Enforcement Alliance of America, Inc., by Richard E. Gardiner; and for the Second Amendment Foundation by William M. Gustavson.
Justice Thomas
delivered the opinion of the Court.
We consider in this case whether, despite appropriation provisions barring the Bureau of Alcohol, Tobacco, and Firearms (ATF) from acting on applications for relief from firearms disabilities of persons convicted of a felony, a federal district court has authority under 18 U. S. C. § 925(c) to grant such relief.
I
After attending a gun show in Laredo, Texas, respondent, Thomas Lamar Bean, a gun dealer, and his associates drove respondent’s vehicle to Nuevo Laredo, Mexico, for dinner. Bean v. Bureau of Alcohol, Tobacco and Firearms, 253 F. 3d 234, 236 (CA5 2001). When Mexican officials stopped the vehicle at the border, they found in the back, in plain view, approximately 200 rounds of ammunition. Ibid. According to respondent, he had instructed his associates to remove any firearms and ammunition from his vehicle, but inexplicably one box remained. Ibid. Respondent was convicted in a Mexican court of importing ammunition into Mexico and sentenced to five years’ imprisonment.
Because of his felony conviction, respondent was prohibited by 18 U. S. C. § 922(g)(1) from possessing, distributing, or receiving firearms or ammunition. Relying on § 925(c), respondent applied to ATF for relief from his firearms disabilities. ATF returned the application unprocessed, explaining that its annual appropriations law forbade it from expending any funds to investigate or act upon applications such as respondent’s.
Respondent then filed suit in the United States District Court for the Eastern District of Texas. Relying on the judicial review provision in § 925(c), respondent asked the District Court to conduct its own inquiry into his fitness to possess a gun, and to issue a judicial order granting relief from his firearms disabilities. Respondent attached various affidavits from persons attesting to his fitness to possess firearms. After conducting a hearing, the court entered judgment granting respondent the requested relief. The Court of Appeals for the Fifth Circuit affirmed, concluding that congressional refusal to provide funding to ATF for reviewing applications such as respondent’s “is not the requisite direct and definite suspension or repeal of the subject rights.” 253 F. 3d, at 239. The Fifth Circuit then proceeded to hold that the District Court had jurisdiction to review ATF’s (in)action. We granted certiorari. 534 U. S. 1112 (2002).
II
Under federal law, a person who is convicted of a felony is prohibited from possessing firearms. See § 922(g)(1). The Secretary of the Treasury is authorized to grant relief from that prohibition if it is established to his satisfaction that certain preconditions are met. See § 925(c). An applicant may seek judicial review from a “United States district court” if his application “is denied by the Secretary.” Ibid.
Since 1992, however, the appropriations bar has prevented ATF, to which the Secretary has delegated authority to act on § 925(e) applications, from using “funds appropriated herein ... to investigate or act upon applications for relief from Federal firearms disabilities under 18 U. S. C. [§]925(c).” Treasury, Postal Service, and General Government Appropriations Act, 1993, Pub. L. 102-393, 106 Stat. 1732. Accordingly, ATF, upon receipt of respondent’s petition, returned it, explaining that “[s]ince October 1992, ATF’s annual appropriation has prohibited the expending of any funds to investigate or act upon applications for relief from Federal firearms disabilities.” App. 33-34. Respondent contends that ATF’s failure to act constitutes a “denial” within the meaning of § 925(c), and that, therefore, district courts have jurisdiction to review such inaction.
We disagree. Inaction by ATF does not amount to a “denial” within the meaning of § 925(c). The text of § 925(c) and the procedure it lays out for seeking relief make clear that an actual decision by ATF on an application is a prerequisite for judicial review, and that mere inaction by ATF does not invest a district court with independent jurisdiction to act on an application.
Grammatically, the phrase “denied by the Secretary” references the Secretary’s decision on whether an applicant “will not be likely to act in a manner dangerous to public safety,” and whether “the granting of the relief would not be contrary to the public interest.” The determination whether an applicant is “likely to act in a manner dangerous to public safety” can hardly be construed as anything but a decision actually denying the application. And, in fact, respondent does not contend that ATF actually passed on his application, but rather claims that “refusal to grant relief constitutes a literal, or at least a constructive, denial of the application because it has precisely the same impact on [the applicant] as denial on the merits.” Brief for Respondent 35 (internal quotation marks and citations omitted).
The procedure that § 925(c) lays out for those seeking relief also leads us to conclude that an actual adverse action on the application by ATF is a prerequisite for judicial review. Section 925(c) requires an applicant, as a first step, to petition the Secretary and establish to the Secretary’s satisfaction that the applicant is eligible for relief. The Secretary, in his discretion, may grant or deny the request based on the broad considerations outlined above. Only then, if the Secretary denies relief, may an applicant seek review in a district court.
This broad authority of the Secretary, i. e., ATF, to grant or deny relief, even when the statutory prerequisites are satisfied, shows that judicial review under § 925(c) cannot occur without a dispositive decision by ATF. First, in the absence of a statutorily defined standard of review for action under § 925(c), the APA supplies the applicable standard. 5 U. S. C. § 701(a). Under the APA, judicial review is usually limited to determining whether agency action is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” § 706(2)(A). Application of the APA standard of review here indicates that judicial review is predicated upon ATF’s dispositive decision: the “arbitrary and capricious” test in its nature contemplates review of some action by another entity, rather than initial judgment of the court itself.
Second, both parts of the standard for granting relief point to ATF as the primary decisionmaker. Whether an applicant is “likely to act in a manner dangerous to public safety” presupposes an inquiry into that applicant’s background — a function best performed by the Executive, which, unlike courts, is institutionally equipped for conducting a neutral, wide-ranging investigation. Similarly, the “public interest” standard calls for an inherently policy-based decision best left in the hands of an agency.
Third, the admission of additional evidence in district court proceedings is contemplated only in exceptional circumstances. See 18 U. S. C. § 925(c) (allowing, “in [district court’s] discretion,” admission of evidence where “failure to do so would result in a miscarriage of justice”). Congressional assignment of such a circumscribed role to a district court shows that the statute contemplates that a district court’s determination will heavily rely on the record and the decision made by ATF. Indeed, the very use in § 925(c) of the word “review” to describe a district court’s responsibility in this statutory scheme signifies that a district court cannot grant relief on its own, absent an antecedent actual denial by ATF.
Accordingly, we hold that the absence of an actual denial of respondent’s petition by ATF precludes judicial review under § 925(c), and therefore reverse the judgment of the Court of Appeals.
It is so ordered.
Title 18 U. S. C. § 925(c) provides:
“A person who is prohibited from possessing, shipping, transporting, or receiving firearms or ammunition may make application to the Secretary for relief from the disabilities imposed by Federal laws with respect to the acquisition, receipt, transfer, shipment, transportation, or possession of firearms, and the Secretary may grant such relief if it is established to his satisfaction that the circumstances regarding the disability, and the applicant’s record and reputation, are such that the applicant will not be likely to act in a manner dangerous to public safety and that the granting of the relief would not be contrary to the public interest. Any person whose application for relief from disabilities is denied by the Secretary may file a petition with the United States district court for the district in which he resides for a judicial review of such denial. The court may in its discretion admit additional evidence where failure to do so would result in a miscarriage of justice. A licensed importer, licensed manufacturer, licensed dealer, or licensed collector conducting operations under this chapter, who makes application for relief from the disabilities incurred under this chapter, shall not be barred by such disability from further operations under his license pending final action on an application for relief filed pursuant to this section. Whenever the Secretary grants relief to any person pursuant to this section he shall promptly publish in the Federal Register notice of such action, together with the reasons therefor.”
Respondent contends that congressional denial of funds to ATF did not eliminate the Secretary’s power to act on his application. In support, respondent notes that § 925(c) refers to the action by “the Secretary.” That claim, however, is waived, as respondent raised it for the first time in his brief on the merits to this Court.
Even if considered on the merits, respondent’s argument faces several difficulties. First, it appears that the Secretary delegated to ATF the exclusive authority to act on petitions brought under § 925(c), see 27 CFR §§ 178.144(b) and (d) (2002); such delegation is not unreasonable. Second, even assuming the Secretary has retained the authority to act on such petitions, it is not clear that respondent would prevail were he to file a requisite action under 5 U. S. C. § 706(1) (providing for judicial review to “compel agency action unlawfully withheld or unreasonably delayed”). Not only does the Secretary, by the explicit terms of the statute, possess broad discretion as to whether to grant relief, see infra, at 76-78, but congressional withholding of funds from ATF would likely inform his exercise of discretion.
In each subsequent year, Congress has retained the bar on the use of appropriated funds to process applications filed by individuals. Treasury and General Government Appropriations Act, 2002, Pub. L. 107-67, 115 Stat. 519; Consolidated Appropriations Act, 2001, Pub. L. 106-554, 114 Stat. 2763A-129; Treasury and General Government Appropriations Act, 2000, Pub. L. 106-58, 113 Stat. 434; Treasury and General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 2681-485; Treasury and General Government Appropriations Act, 1998, Pub. L. 105-61, 111 Stat. 1277; Treasury, Postal Service, and General Government Appropriations Act, 1997, Pub. L. 104-208, 110 Stat. 3009-319; Treasury, Postal Service, and General Government Appropriations Act, 1996, Pub. L. 104-52, 109 Stat. 471; Treasury, Postal Service and General Government Appropriations Act, 1995, Pub. L. 103-329, 108 Stat. 2385; Treasury, Postal Service, and General Government Appropriations Act, 1994, Pub. L. 103-123, 107 Stat. 1228.
Also counseling against construing failure to act as a denial for purposes of § 925(c) is the fact that while the Administrative Procedure Act (APA) draws a distinction between a “denial” and a “failure to act,” see 5 U. S. C. § 551(13), an applicant may obtain judicial review under § 925(c) only if an application is denied. See 2A N. Singer, Sutherland on Statutes and Statutory Construction §46:06, p. 194 (6th ed. 2000) (“The use of different terms within related statutes generally implies that different meanings were intended”).
Question: Who is the respondent of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
|
songer_applfrom
|
E
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What follows is an opinion from a United States Court of Appeals. Your task is to identify the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court).
Johnny C. BROWN, Plaintiff-Appellant, v. Ann CROWE, Defendant, Martin Marietta Energy Systems, Inc., Defendant-Appellee.
No. 91-6071.
United States Court of Appeals, Sixth Circuit.
Argued April 2, 1992.
Decided May 11, 1992.
Dorothy B. Stulberg (argued and briefed), Mostoller & Stulberg, Oak Ridge, Tenn., for plaintiff-appellant.
E.H. Rayson (argued), Kramer, Rayson, McVeigh, Leake & Rodgers, Knoxville, Tenn., Patricia L. McNutt (briefed), G. Wilson Horde, Oak Ridge, Tenn., for defendant-appellee.
John F. Suhre, E.E.O.C., Office of the Gen. Counsel, Washington, D.C. (argued and briefed),' for E.E.O.C., amicus curiae.
Before: MERRITT, Chief Judge; MARTIN and SILER, Circuit Judges.
MERRITT, Chief Judge.
After the plaintiff in this Title VII case was first fired, then recalled and demoted by his employer, he filed a charge of race discrimination with a state human rights commission that acted in concert with the EEOC under the provisions of a worksharing agreement between the two agencies. The resulting bureaucratic morass that followed, through no fault of the plaintiff, is what we must now consider. This appeal concerns whether a plaintiffs filing of a Title VII charge with a state agency, whose subsequent actions cause that charge not to meet statutory time requirements, should be considered to have been filed with the EEOC in a timely manner. We apply the doctrine of equitable tolling and hold that the statutory period of Title VII is tolled where, through no fault of the plaintiff, the procedural errors of a state administrative agency would otherwise defeat the plaintiff’s right to litigate his case. We therefore reverse the judgment of the District Court and remand the case for further proceedings.
I.
Under Title VII’s § 706(e), the general rule is that charges are to be filed with the EEOC within 180 days of the alleged discriminatory act, with one exception: where proceedings have been filed with a state or local agency first, “such charge shall be filed ... within three hundred days” of discrimination or within thirty days of the termination of state or local proceedings, “whichever is earlier.” 42 U.S.C.A. § 2000 e-5(e) (West 1981). Under § 706(c), when a discrimination charge arises in a state which has a state or local law prohibiting the discriminatory act alleged or where a state or local authority is empowered to grant or seek relief from such an act, “no charge may be filed under subsection (b) [which provides for filing of charges with the EEOC] by the person aggrieved before the expiration of sixty days after proceedings have been commenced under the State or local law, unless such proceedings have been earlier terminated....” 42 U.S.C.A § 2000e-5(c) (West 1981). Read together, if a plaintiff does not file a charge under the general 180-day rule, the 60-day deferral period of § 706(c) gives a state agency “an opportunity to combat discrimination free from federal intervention.” EEOC v. Commercial Office Products Co., 486 U.S. 107, 110-11, 108 S.Ct. 1666, 1669, 100 L.Ed.2d 96 (1988). In light of that 60-day period, “a complainant must file a charge with the appropriate state or local agency, or have the EEOC refer the charge to that agency, within 240 days of the alleged discriminatory event in order to ensure that it may be filed with the EEOC within the 300-day limit.” Id. at 111, 108 S.Ct. at 1669, citing Mohasco Corp. v. Silver, 447 U.S. 807, 814, 100 S.Ct. 2486, 2491, 65 L.Ed.2d 532 (1980). “If the complainant does not file within 240 days, the charge may still be timely filed with the EEOC if the state or local agency terminates its proceedings before 300 days.” Id. at 111—12, 108 S.Ct. at 1669.
Plaintiff Brown, an African-American male, was employed by the defendant Martin Marietta Energy Systems for fourteen years, rising from a job as a janitor to become a program finance officer and administrator. On January 14, 1988, the plaintiff was terminated from his position as a finance officer. He was recalled the next day and was told that his termination would be “converted” to a transfer and a demotion to his original job as a janitor.
179 days after his initial termination Brown contacted the EEOC’s Nashville office by mail. Some two months later, the plaintiff submitted a charge of discrimination, which was received by the Tennessee Human Rights Commission (“THRC”) on September 30, 1988. Under the terms of a worksharing agreement between the EEOC and the THRC, a THRC clerk assigned charge numbers for both agencies’ files at that time. The THRC forwarded it to the EEOC, which received it on October 7, 1988. When the THRC forwarded the charge, it used a standardized form that contained three blocks for noting which agency planned to process initially the charge. The THRC marked one block, reading that “[p]ursuant to the work-sharing agreement, this charge is to be initially processed by the 706 Agency.”
The plaintiff’s charge had originated in Monroe County, a county for which the THRC bore initial processing responsibility under the worksharing agreement. But, the plaintiff also alleged ongoing discrimination and retaliation under Title VII, and under the worksharing agreement, such charges were part of a category of claims that the EEOC would initially process and that the THRC would waive its rights to handle. Moreover, 255 days had elapsed between the day he was terminated and the date the charge was filed. To be timely under Tennessee law, charges must be brought within 180 days of the alleged discrimination. Under the worksharing agreement, the THRC had agreed to “defer immediately to EEOC all charges received and determined as untimely under Tennessee law” for a failure to meet the state’s 180-day filing deadline.
After conducting an initial investigation, the EEOC notified the THRC on October 17, 1988 that it would not pursue further processing of plaintiff’s charge. THRC now began an investigation, issuing a notice of administrative closure on April 3, 1990. A right-to-sue notice was issued to Brown on the same day. Well over 300 days had elapsed between the termination and the state agency’s closure of its proceedings.
The District Court granted the defendant’s motion for summary judgment on two grounds: first, that the plaintiff had not filed a charge with the EEOC within 240 days, and second, that the THRC had not terminated its inquiries within the 300-day period required by Title VII’s § 706(e). The District Court did not address the effect of the worksharing agreement’s waiver provisions, nor was it asked to consider whether equitable principles should operate to toll the filing requirements for the plaintiff.
II.
Plaintiff and amicus curiae EEOC urge us to resolve whether the worksharing provision’s waiver sections are self-executing so that, regardless of the THRC’s annotation on the transmittal form, an “automatic waiver” of its processing rights had occurred. We need not resolve this complex issue, however, because we believe that the doctrine of equitable tolling provides appropriate relief, although some brief analysis of Title VII’s timeliness provisions is necessary to resolve the threshold issue we face. As a threshold matter, we address this court’s power sua sponte to consider the equitable tolling issue, which is obviously latent in the case.
As a general rule, this court will usually decline to entertain arguments not presented in the first instance to the trial court. See, e.g., Taft Broadcasting Co. v. United States, 929 F.2d 240, 243-44 (6th Cir.1991); Estate of Quirk v. Commissioner, 928 F.2d 751, 757-59 (6th Cir.1991); Sigmon Fuel Co. v. Tennessee Valley Authority, 754 F.2d 162, 164-65 (6th Cir.1985). See also Walters v. First Tennessee Bank, N.A., 855 F.2d 267, 271 (6th Cir.1988), cert. denied, 489 U.S. 1067, 109 S.Ct. 1344, 103 L.Ed.2d 812 (1989) (court declining to resolve issue concerning tolling of limitations period that was first raised on appeal by plaintiff). However, as we have noted earlier, “many decisions in this circuit have expressed a willingness and found reason to take up issues raised for the first time during the process of appeal.” Taft Broadcasting, 929 F.2d at 244. The court’s decision to address issues first raised on appeal stems from the historical powers of equity vested in courts “to prevent manifest injustice and to promote procedural efficiency.” See generally Taft Broadcasting, 929 F.2d at 244, citing United States v. Baker, 807 F.2d 1315, 1321 (6th Cir.1986). Thus, a federal appellate court is always empowered to resolve any issue not considered below “where the proper resolution is beyond any doubt or where injustice ... might otherwise result.” Meador v. Cabinet for Human Resources, 902 F.2d 474, 477 (6th Cir.), cert. denied, — U.S. —, 111 S.Ct. 182, 112 L.Ed.2d 145 (1990), citing Newmyer v. Philatelic Leasing, Ltd., 888 F.2d 385, 397 (6th Cir.1989), cert. denied, 495 U.S. 930, 110 S.Ct. 2169, 109 L.Ed.2d 499 (1990). This power to consider an issue sua sponte is closely akin to the court’s discretionary power to consider clear errors in a lower court’s proceedings where the errors or omissions are obvious, unfair or undermine the integrity or public confidence of judicial proceedings. See generally Molecular Technology Corp. v. Valentine, 925 F.2d 910, 920-21 (6th Cir.1991), and cases cited therein.
Both bases for our limited exception to the general rule are present. The bureaucratic confusion and error, and the resulting administrative tardiness in fulfilling the statutory 300-day filing requirement, were in no way attributable to any conduct on the part of the plaintiff. Section 706(e) provides for a federal filing more than 180 days after the date of discrimination, if the charge is filed with the state agency “within three hundred days after the alleged unlawful employment practice occurred....” 42 U.S.C.A. § 2000e-5(e) (West 1981).
The defendant contends that under the rule of Mohasco Corp. v. Silver, 447 U.S. 807, 817, 100 S.Ct. 2486, 2492, 65 L.Ed.2d 532 (1980), the plaintiff has nonetheless failed to bring his charge within the 300-day period, regardless of the agencies’ actions or inactions. In Mohasco, the Supreme Court reasoned that § 706(c)’s prohibition on filing with the EEOC until sixty days after proceedings have been commenced under state law, “unless such proceedings have been earlier terminated,” meant that the plaintiff’s filing was untimely. See 42 U.S.C.A. § 2000e-5(c) (West 1991). The Court reasoned that the EEOC itself began state proceedings by forwarding the plaintiff’s letter to the state agency. Id. at 816, 100 S.Ct. at 2492. In doing so, however, the earliest date upon which the EEOC could act, by § 706(c)’s dictates, was the 351st day — i.e., exactly sixty days after it forwarded the letter to the state agency — so that the charge was not timely. Summary judgment to the defendant on this issue was therefore considered appropriate. Id. at 816-17, 100 S.Ct. at 2492-93.
While reaffirming Mohasco as a general rule, the Supreme Court has more recently examined the timeliness of charge filings under worksharing agreements in EEOC v. Commercial Office Products Co., 486 U.S. 107, 108 S.Ct. 1666, 100 L.Ed.2d 96 (1988). Considering a worksharing agreement similar to the one in this case, the Supreme Court held that a state agency’s decision to waive § 706(c)’s sixty-day period “terminates” its proceedings, so that the EEOC may immediately deem the charge to have been timely filed. Id. at 115, 108 S.Ct. at 1671. The Court also recognized that such an interpretation would better comport with Title VII’s purposes: “to [provide] States with an opportunity to forestall federal intervention” and “[to] promote ‘time economy and the expeditious handling of cases’,” by not requiring the EEOC to put its own actions into “pointless” abeyance for sixty days. Id. at 118, 108 S.Ct. at 1672, citing 110 Cong.Rec. 9790 (1964) (Sen. Dirksen’s remarks).
We agree with the District Court that the logic of Commercial Products, not Mohasco, controls this case. By filing his charge with the THRC — which, under the worksharing agreement, acted as agent for the EEOC, and vice versa — Brown simultaneously filed his charge with the EEOC. To reason that Brown had not met the sixty-day period of § 706(c) would be irreconcilable with Title VIPs purposes because such a result “would result in extraordinary inefficiency without furthering any other goal of the Act.” Commercial Office Products, 486 U.S. at 119, 108 S.Ct. at 1673. Furthermore, the act or omission that occurred here—i.e., the THRC’s mistaken statement of intent to process the charge initially, which passed unnoticed and unchallenged by the EEOC—was an occurrence unknown to the plaintiff, for which he was not responsible. The EEOC has fully acknowledged this to be the case. Rejection of the plaintiff’s claim as being untimely under these circumstances would tend to thwart procedural efficiency, by “[frustrating] the congressional intent to ensure state and local agencies the opportunity to employ their expertise to resolve discrimination complaints.” Id. at 120, 108 S.Ct. at 1673-74. Under the circumstances, to reject the plaintiff’s claim due to the bureaucratic confusion between the two agencies would be manifestly unjust.
III.
The Supreme Court squarely held in Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 398, 102 S.Ct. 1127, 1135, 71 L.Ed.2d 234 (1982) that “compliance with the filing period [is] not a jurisdictional prerequisite to filing a Title VII suit, but [is] a requirement subject to waiver as well as tolling when equity so requires.... ” The Court reasoned that by construing Title VII’s time periods to be analogous to statutes of limitations, “we honor the remedial purpose of the legislation as a whole without negating the particular purpose of the filing requirement, to give prompt notice to the employer.” Id. The Supreme Court has reaffirmed the continued validity of Pipes’ reasoning in several recent cases. See, e.g., Irwin v. Veterans Administration, — U.S. —, 111 S.Ct. 453, 457 & n. 2, 112 L.Ed.2d 435 (1990) (recognizing that “[t]ime requirements in law suits between private litigants are customarily subject to ‘equitable tolling’ ”); Hallstrom v. Tillamook County, 493 U.S. 20, 27, 110 S.Ct. 304, 309, 107 L.Ed.2d 237 (1989).
The Supreme Court’s holding in Zipes was fully in accord with this Court’s own jurisprudence. As we noted in 1981: “The informal and flexible nature of [the EEOC’s] administrative process suggests that we should not apply the time requirements inflexibly and mechanically....” Morgan v. Washington Manufacturing Co., 660 F.2d 710, 711 (6th Cir.1981). In full agreement with the Supreme Court’s later reasoning in Zipes, the Sixth Circuit held that Title VIPs various filing requirements were no longer considered to be a jurisdictional requirement. See Wright v. State of Tennessee, 628 F.2d 949, 953 (6th Cir.1980) (en banc) (time of filing notice of claim under ADEA held not to be a jurisdictional prerequisite); Leake v. University of Cincinnati, 605 F.2d 255, 259 (6th Cir.1979) (“Title VII time limitations are jurisdictional in the sense that that phrase is used in relation to statutes of limitations and equitable principles should apply in circumstances which warrant their application.”).
We held in Morgan v. Washington Manufacturing Co. that in the absence of prejudice to a defendant, or a showing of bad faith or lack of diligence by a claimant, considerations of equity favored tolling Title VII’s filing periods when the claimant makes a timely filing with the EEOC or a federal agency with jurisdiction in “some fields of employment discrimination.” Morgan, 660 F.2d at 712. In Morgan, as here, the EEOC appeared as amicus curiae and during oral argument advocated that we adopt equitable tolling under these circumstances. We agree with the EEOC, and believe that under Morgan, principles of fairness and consistency suggest that we toll the statutory filing requirements as applied to this plaintiff. See also Farrell v. Automobile Club of Michigan, 870 F.2d 1129, 1134 (6th Cir.1989) (tolling was authorized for plaintiff who had been otherwise diligent and when defendant received adequate notice of plaintiffs claim in case under ERISA), and Leake, 605 F.2d at 259.
The plaintiff, while outside the general 180-day rule of § 706(e), still complied with the alternative 300-day period. But for the THRC’s erroneous annotation, timely initial processing would have taken place under the terms of the worksharing agreement by the EEOC, and not by the THRC. Counsel for the amicus EEOC conceded as much during oral arguments. The state agency would therefore have terminated its proceedings within 300 days, and the charge would have been timely. There is also no evidence, nor was it argued by the defendant, that defendant failed to receive adequate notice under these circumstances to the detriment of its rights. Thus, under these facts we are presented with a situation ripe for equitable tolling under the teachings of Zipes and this court’s decisions in Morgan and Leake. Cf. Brown v. Mead Corp., 646 F.2d 1163, 1167 (6th Cir.1981) (appellant failed to bring herself within equities that would otherwise make tolling appropriate).
The Supreme Court’s refusal to apply equitable tolling to another Title VII claimant in Baldwin County Welcome Center v. Brown, 466 U.S. 147, 104 S.Ct. 1723, 80 L.Ed.2d 196 (1984) (per curiam) is readily distinguishable from the plaintiff’s case here. In Baldwin County, apart from the plaintiff’s own bare assertion of her “diligent efforts” despite her failure to file suit within ninety days of receipt of a right-to-sue notice, the Court concluded that the sparseness of the record provided no sense of the equities to be balanced in determining the appropriateness of tolling. Id. at 160-51, 104 S.Ct. at 1725-26. Nor do we find the defendant’s citations to decisions from other circuits to be controlling on these facts. Cf. Kocian v. Getty Refining & Marketing Co., 707 F.2d 748, 753-55 (3rd Cir.), cert. denied, 464 U.S. 852, 104 S.Ct. 164, 78 L.Ed.2d 150 (1983) (rejecting plaintiff’s claim that conduct on part of EEOC “misled” her into filing late), and Citicorp Person-to-Person Financial Corp. v. Brazell, 658 F.2d 232, 234-35 (4th Cir.1981) (finding no basis for equitable tolling where legal mistake, if any, was solely plaintiff’s and was not induced by either EEOC or defendant employer).
The apparent “legal mistake” here was manifestly not of the plaintiff’s doing, nor was it within his knowledge or within his control to rectify. To deny relief to the plaintiff under the peculiar facts of this case “would be to exalt form over substance and preclude relief to a potentially meritorious claim simply because it was the victim of a bureaucratic mix-up,” as well as to defeat two of the goals sought by the THRC and the EEOC: the minimization of red tape and the efficient processing of discrimination charges. See, e.g., EEOC v. Techalloy Maryland, 894 F.2d 676, 679 (4th Cir.1990) (interpreting similar work-sharing agreement). The errors of the administrative agencies should not be visited upon the plaintiff, where he did all that he could have reasonably done to file a charge of discrimination in an otherwise timely manner. See, e.g., Ferguson v. Kroger Co., 545 F.2d 1034, 1035 (6th Cir.1976) (administrative delay of EEOC in not following its own established procedures held not to defeat claimant’s right to litigate discrimination claim). We hold that the equitable doctrine of tolling applies under these circumstances.
IV.
Accordingly, the judgment of the District Court is REVERSED and the case REMANDED for further proceedings consistent with this opinion.
. For an example of a similar transmittal form between a state agency and the EEOC, see Trevino-Barton v. Pittsburgh Nat'l Bank, 919 F.2d 874, 876 (3rd Cir.1990).
. For cases construing the effect of worksharing agreements on Title VII’s filing periods, see Worthington v. Union Pacific R.R., 948 F.2d 477 (8th Cir.1991); Marlowe v. Bottarelli, 938 F.2d 807 (7th Cir.1991); Sofferin v. American Airlines, Inc., 923 F.2d 552 (7th Cir.1991); Trevino-Barton v. Pittsburgh Nat'l Bank, 919 F.2d 874 (3rd Cir.1990); EEOC v. Techalloy Maryland, Inc., 894 F.2d 676 (4th Cir.1990); Green v. Los Angeles County Superintendent of Schools, 883 F.2d 1472 (9th Cir.1989); and Griffin v. Air Prods. & Chems., Inc., 883 F.2d 940 (11th Cir.1989). While these cases hold that “automatic” or “self-executing" filings had occurred under the terms of various agreements between the EEOC and state human rights agencies, all of these cases are factually distinguishable from this case on at least one critical point. In none of these cases did a state agency apparently violate the terms of the predicate worksharing agreement, by erroneously indicating that it would initially process a charge that should have been processed by the EEOC. This court has only tangentially considered a similar issue, in a brief unpublished opinion that has no precedential power. Home v. Allen Metro. Hous. Auth., 869 F.2d 1490 (6th Cir.1989) (per curiam).
Question: What is the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court)?
A. Trial (either jury or bench trial)
B. Injunction or denial of injunction or stay of injunction
C. Summary judgment or denial of summary judgment
D. Guilty plea or denial of motion to withdraw plea
E. Dismissal (include dismissal of petition for habeas corpus)
F. Appeals of post judgment orders (e.g., attorneys' fees, costs, damages, JNOV - judgment nothwithstanding the verdict)
G. Appeal of post settlement orders
H. Not a final judgment: interlocutory appeal
I. Not a final judgment: mandamus
J. Other (e.g., pre-trial orders, rulings on motions, directed verdicts) or could not determine nature of final judgment
K. Does not fit any of the above categories, but opinion mentions a "trial judge"
L. Not applicable (e.g., decision below was by a federal administrative agency, tax court)
Answer:
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songer_habeas
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B
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What follows is an opinion from a United States Court of Appeals.
Your task is to determine whether the case was an appeal of a decision by the district court on a petition for habeas corpus. A state habeas corpus case is one in which a state inmate has petitioned the federal courts.
UNITED STATES of America ex rel. Charles F. KELLEY, Appellant, v. Alfred T. RUNDLE, Warden, Eastern State Correctional Institution, Philadelphia, Pennsylvania.
No. 15429.
United States Court of Appeals Third Circuit.
Submitted Nov. 19, 1965.
Decided Dec. 6, 1965.
Charles F. Kelley, pro se.
James C. Crumlish, Jr., U. S. Atty., Abner Silver, Asst. U. S. Atty., Philadelphia, Pa., Abner H. Silver, Asst. Dist. Atty., Joseph M. Smith, Asst. Dist. Atty., Chief, Appeals Division, F. Emmett Fitzpatrick, Jr., First Asst. Dist. Atty., James C. Crumlish, Jr., Dist. Atty., Philadelphia, Pa., for appellee.
Before KALODNER, Chief Judge, and McLAUGHLIN and SMITH, Circuit Judges.
PER CURIAM:
On review of the record we find no error. The Order of the District Court denying the petition for the writ of habeas corpus will be affirmed for the reasons so well stated by Judge Higginbotham in his opinion reported at 242 F.Supp. 708 (E.D.Pa.1965).
Question: Was the case an appeal of a decision by the district court on a petition for habeas corpus?
A. no
B. yes, state habeas corpus (criminal)
C. yes, federal habeas corpus (criminal)
D. yes, federal habeas corpus relating to deportation
Answer:
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sc_decisiontype
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A
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the type of decision made by the court among the following: Consider "opinion of the court (orally argued)" if the court decided the case by a signed opinion and the case was orally argued. For the 1791-1945 terms, the case need not be orally argued, but a justice must be listed as delivering the opinion of the Court. Consider "per curiam (no oral argument)" if the court decided the case with an opinion but without hearing oral arguments. For the 1791-1945 terms, the Court (or reporter) need not use the term "per curiam" but rather "The Court [said],""By the Court," or "By direction of the Court." Consider "decrees" in the infrequent type of decisions where the justices will typically appoint a special master to take testimony and render a report, the bulk of which generally becomes the Court's decision. This type of decision usually arises under the Court's original jurisdiction and involves state boundary disputes. Consider "equally divided vote" for cases decided by an equally divided vote, for example when a justice fails to participate in a case or when the Court has a vacancy. Consider "per curiam (orally argued)" if no individual justice's name appears as author of the Court's opinion and the case was orally argued. Consider "judgment of the Court (orally argued)" for formally decided cases (decided the case by a signed opinion) where less than a majority of the participating justices agree with the opinion produced by the justice assigned to write the Court's opinion.
MICHIGAN DEPARTMENT OF STATE POLICE et al. v. SITZ et al.
No. 88-1897.
Argued February 27, 1990
Decided June 14, 1990
Rehnquist, C. J., delivered the opinion of the Court, in which White, O’Connor, Scalia, and Kennedy, JJ., joined. Blackmun, J., filed an opinion concurring in the judgment, post, p. 455. Brennan, J., filed a dissenting opinion, in which Marshall, J., joined, post, p. 456. Stevens, J., filed a dissenting opinion, in which Brennan and Marshall, JJ., joined as to Parts I and II, post, p. 460.
Thomas L. Casey, Assistant Solicitor General of Michigan, argued the cause for petitioners. With him on the briefs were Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, and Patrick J. O’Brien, Assistant Attorney General.
Stephen L. Nightingale argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Starr, Assistant Attorney General Dennis, and Deputy Solicitor General Bryson.
Mark Granzotto argued the cause for respondents. With him on the brief were Deborah L. Gordon, William C. Gage, and John A. Powell.
Briefs of amici curiae urging reversal were filed for the State of California et al. by John K. Van de Kamp, Attorney General of California, Richard B. Iglehart, Chief Assistant Attorney General, John H. Sugiyama, Senior Assistant Attorney General, Morris Beatus, Supervising Deputy Attorney General, and Ronald E. Niver, Deputy Attorney General, and by the Attorneys General for their respective States as follows: Robert A. Butterworth of Florida, Lacy H. Thornburg of North Carolina, and James M. Shannon of Massachusetts; for the State of Illinois et al. by Neil F. Hartigan, Attorney General of Illinois, Robert J. Ruiz, Solicitor General, and Terence M. Madsen, Marcia L. Friedl, and Michael J. Singer, Assistant Attorneys General, Don Siegelman, Attorney General of Alabama, Steve Clark, Attorney General of Arkansas, Duane Woodard, Attorney General of Colorado, Clarine Nardi Riddle, Acting Attorney General of Connecticut, Charles M. Oberly III, Attorney General of Delaware, Michael J. Bowers, Attorney General of Georgia, Jim Jones, Attorney General of Idaho, Tom Miller, Attorney General of Iowa, Robert T. Stephan, Attorney General of Kansas, Frederic J. Cowan, Attorney General of Kentucky, James E. Tierney, Attorney General of Maine, J. Joseph Curran, Jr., Attorney General of Maryland, Hubert H. Humphrey III, Attorney General of Minnesota, William L. Webster, Attorney General of Missouri, Marc Racicot, Attorney General of Montana, John P. Arnold, Attorney General of New Hampshire, Peter N. Perretti, Jr., Attorney General of New Jersey, Hal Stratton, Attorney General of New Mexico, Robert Abrams, Attorney General of New York, Lacy H. Thornburg, Attorney General of North Carolina, Nicholas Spaeth, Attorney General of North Dakota, Anthony J. Celebrezze, Jr., Attorney General of Ohio, T. Travis Medlock, Attorney General of South Carolina, Roger A. Tellinghuisen, Attorney General of South Dakota, Mary Sue Terry, Attorney General of Virginia, and Joseph B. Meyer, Attorney General of Wyoming; for American Alliance for Rights and Responsibilities, Inc., et al. by Richard A. Rossman and Abraham Singer; for the Insurance Institute for Highway Safety et al. by Michele McDowell Fields, Andreio R. Hricko, Stephen L. Oesch, and Ronald G. Precup; for the National Governors’ Association et al. by Benna Ruth Solomon, Andrew L. Frey, and Erika Z. Jones; for the Washington Legal Foundation et al. by Richard K. Willard, Daniel J. Popeo, and Paul D. Kamenar; and for the Michigan State Chapters of Mothers Against Drunk Driving by Michael B. Rizik, Jr.
Briefs of amici curiae were filed for the American Federation of Labor and Congress of Industrial Organizations by Walter Kamiat and Laurence Gold; for the Appellate Committee of the California District Attorneys Association by Ira Reiner, Harry B. Sondheim, and Dirk L. Hudson; and for the National Organization of Mothers Against Drunk Driving by David Bryant and Eric R. Cromartie.
Chief Justice Rehnquist
delivered the opinion of the Court.
This case poses the question whether a State’s use of highway sobriety checkpoints violates the Fourth and Fourteenth Amendments to the United States Constitution. We hold that it does not and therefore reverse the contrary holding of the Court of Appeals of Michigan.
Petitioners, the Michigan Department of State Police and its director, established a sobriety checkpoint pilot program in early 1986. The director appointed a Sobriety Checkpoint Advisory Committee comprising representatives of the State Police force, local police forces, state prosecutors, and the University of Michigan Transportation Research Institute. Pursuant to its charge, the advisory committee created guidelines setting forth procedures governing checkpoint operations, site selection, and publicity.
Under the guidelines, checkpoints would be set up at selected sites along state roads. All vehicles passing through a checkpoint would be stopped and their drivers briefly examined for signs of intoxication. In cases where a checkpoint officer detected signs of intoxication, the motorist would be directed to a location out of the traffic flow where an officer would check the motorist’s driver’s license and car registration and, if warranted, conduct further sobriety tests. Should the field tests and the officer’s observations suggest that the driver was intoxicated, an arrest would be made. All other drivers would be permitted to resume their journey immediately.
The first—and to date the only—sobriety checkpoint operated under the program was conducted in Saginaw County with the assistance of the Saginaw County Sheriff’s Department. During the 75-minute duration of the checkpoint’s operation, 126 vehicles passed through the checkpoint. The average delay for each vehicle was approximately 25 seconds. Two drivers were detained for field sobriety testing, and one of the two was arrested for driving under the influence of alcohol. A third driver who drove through without stopping was pulled over by an officer in an observation vehicle and arrested for driving under the influence.
On the day before the operation of the Saginaw County checkpoint, respondents filed a complaint in the Circuit Court of Wayne County seeking declaratory and injunctive relief from potential subjection to the checkpoints. Each of the respondents “is a licensed driver in the State of Michigan . . . who regularly travels throughout the State in his automobile.” See Complaint, App. 3a-4a. During pretrial proceedings, petitioners agreed to delay further implementation of the checkpoint program pending the outcome of this litigation.
After the trial, at which the court heard extensive testimony concerning, inter alia, the “effectiveness” of highway sobriety checkpoint programs, the court ruled that the Michigan program violated the Fourth Amendment and Art. 1, § 11, of the Michigan Constitution. App. to Pet. for Cert. 132a. On appeal, the Michigan Court of Appeals affirmed the holding that the program violated the Fourth Amendment and, for that reason, did not consider whether the program violated the Michigan Constitution. 170 Mich. App. 433, 445, 429 N. W. 2d 180, 185 (1988). After the Michigan Supreme Court denied petitioners’ application for leave to appeal, we granted certiorari. 493 U. S. 806 (1989).
To decide this case the trial court performed a balancing test derived from our opinion in Brown v. Texas, 443 U. S. 47 (1979). As described by the Court of Appeals, the test involved “balancing the state’s interest in preventing accidents caused by drunk drivers, the effectiveness of sobriety checkpoints in achieving that goal, and the level of intrusion on an individual’s privacy caused by the checkpoints.” 170 Mich. App., at 439, 429 N. W. 2d, at 182 (citing Brown, supra, at 50-51). The Court of Appeals agreed that “the Brown three-prong balancing test was the correct test to be used to determine the constitutionality of the sobriety checkpoint plan.” 170 Mich. App., at 439, 429 N. W. 2d, at 182.
As characterized by the Court of Appeals, the trial court’s findings with respect to the balancing factors were that the State has “a grave and legitimate” interest in curbing drunken driving; that sobriety checkpoint programs are generally “ineffective” and, therefore, do not significantly further that interest; and that the checkpoints’ “subjective intrusion” on individual liberties is substantial. Id., at 439, 440, 429 N. W. 2d, at 183, 184. According to the court, the record disclosed no basis for disturbing the trial court’s findings, which were made within the context of an analytical framework prescribed by this Court for determining the constitutionality of seizures less intrusive than traditional arrests. Id., at 445, 429 N. W. 2d, at 185.
In this Court respondents seek to defend the judgment in their favor by insisting that the balancing test derived from Brown v. Texas, supra, was not the proper method of analysis. Respondents maintain that the analysis must proceed from a basis of probable cause or reasonable suspicion, and rely for support on language from our decision last Term in Treasury Employees v. Von Raab, 489 U. S. 656 (1989). We said in Von Raab:
“[W]here a Fourth Amendment intrusion serves special governmental needs, beyond the normal need for law enforcement, it is necessary to balance the individual’s privacy expectations against the Government’s interests to determine whether it is impractical to require a warrant or some level of individualized suspicion in the particular context.” Id., at 665-666.
Respondents argue that there must be a showing of some special governmental need “beyond the normal need” for criminal law enforcement before a balancing analysis is appropriate, and that petitioners have demonstrated no such special need.
But it is perfectly plain from a reading of Von Raab, which cited and discussed with approval our earlier decision in United States v. Martinez-Fuerte, 428 U. S. 543 (1976), that it was in no way designed to repudiate our prior cases dealing with police stops of motorists on public highways. Martinez-Fuerte, supra, which utilized a balancing analysis in approving highway checkpoints for detecting illegal aliens, and Brown v. Texas, supra, are the relevant authorities here.
Petitioners concede, correctly in our view, that a Fourth Amendment “seizure” occurs when a vehicle is stopped at a checkpoint. Tr. of Oral Arg. 11; see Martinez-Fuerte, supra, at 556 (“It is agreed that checkpoint stops are ‘seizures’ within the meaning of the Fourth Amendment”); Brower v. County of Inyo, 489 U. S. 593, 597 (1989) (Fourth Amendment seizure occurs “when there is a governmental termination of freedom of movement through means intentionally applied” (emphasis in original)). The question thus becomes whether such seizures are “reasonable” under the Fourth Amendment.
It is important to recognize what our inquiry is not about. No allegations are before us of unreasonable treatment of any person after an actual detention at a particular checkpoint. See Martinez-Fuerte, 428 U. S., at 559 (“[C]laim that a particular exercise of discretion in locating or operating a checkpoint is unreasonable is subject to post-stop judicial review”). As pursued in the lower courts, the instant action challenges only the use of sobriety checkpoints generally. We address only the initial stop of each motorist passing through a checkpoint and the associated preliminary questioning and observation by checkpoint officers. Detention of particular motorists for more extensive field sobriety testing may require satisfaction of an individualized suspicion standard. Id., at 567.
No one can seriously dispute the magnitude of the drunken driving problem or the States’ interest in eradicating it. Media reports of alcohol-related death and mutilation on the Nation’s roads are legion. The anecdotal is confirmed by the statistical. “Drunk drivers cause an annual death toll of over 25,000 [ ] and in the same time span cause nearly one million personal injuries and more than five billion dollars in property damage.” 4 W. LaFave, Search and Seizure: A Treatise on the Fourth Amendment § 10.8(d), p. 71 (2d ed. 1987). For decades, this Court has “repeatedly lamented the tragedy.” South Dakota v. Neville, 459 U. S. 553, 558 (1983); see Breithaupt v. Abram, 352 U. S. 432, 439 (1957) (“The increasing slaughter on our highways . . . now reaches the astounding figures only heard of on the battlefield”).
Conversely, the weight bearing on the other scale—the measure of the intrusion on motorists stopped briefly at sobriety checkpoints—is slight. We reached a similar conclusion as to the intrusion on motorists subjected to a brief stop at a highway checkpoint for detecting illegal aliens. See Martinez-Fuerte, supra, at 558. We see virtually no difference between the levels of intrusion on law-abiding motorists from the brief stops necessary to the effectuation of these two types of checkpoints, which to the average motorist would seem identical save for the nature of the questions the checkpoint officers might ask. The trial court and the Court of Appeals, thus, accurately gauged the “objective” intrusion, measured by the duration of the seizure and the intensity of the investigation, as minimal. See 170 Mich. App., at 444, 429 N. W. 2d, at 184.
With respect to what it perceived to be the “subjective” intrusion on motorists, however, the Court of Appeals found such intrusion substantial. See supra, at 449. The court first affirmed the trial court's finding that the guidelines governing checkpoint operation minimize the discretion of the officers on the scene. But the court also agreed with the trial court’s conclusion that the checkpoints have the potential to generate fear and surprise in motorists. This was so because the record failed to demonstrate that approaching motorists would be aware of their option to make U-turns or turnoffs to avoid the checkpoints. On that basis, the court deemed the subjective intrusion from the checkpoints unreasonable. Id., at 443-444, 429 N. W. 2d, at 184-185.
We believe the Michigan courts misread our cases concerning the degree of “subjective intrusion” and the potential for generating fear and surprise. The “fear and surprise” to be considered are not the natural fear of one who has been drinking over the prospect of being stopped at a sobriety checkpoint but, rather, the fear and surprise engendered in law-abiding motorists by the nature of the stop. This was made clear in Martinez-Fuerte. Comparing checkpoint stops to roving patrol stops considered in prior cases, we said:
“[W]e view checkpoint stops in a different light because the subjective intrusion—the generating of concern or even fright on the part of lawful travelers—is appreciably less in the case of a checkpoint stop. In [United States v.] Ortiz, [422 U. S. 891 (1975),] we noted:
“‘[T]he circumstances surrounding a checkpoint stop and search are far less intrusive than those attending a roving-patrol stop. Roving patrols often operate at night on seldom-traveled roads, and their approach may frighten motorists. At traffic checkpoints the motorist can see that other vehicles are being stopped, he can see visible signs of the officers’ authority, and he is much less likely to be frightened or annoyed by the intrusion. 422 U. S., at 894-895.’” Martinez-Fuerte, 428 U. S., at 558.
See also id, at 559. Here, checkpoints are selected pursuant to the guidelines, and uniformed police officers stop every approaching vehicle. The intrusion resulting from the brief stop at the sobriety checkpoint is for constitutional purposes indistinguishable from the checkpoint stops we upheld in Martinez-Fuerte.
The Court of Appeals went on to consider as part of the balancing analysis the “effectiveness” of the proposed checkpoint program. Based on extensive testimony in the trial record, the court concluded that the checkpoint program failed the “effectiveness” part of the test, and that this failure materially discounted petitioners’ strong interest in implementing the program. We think the Court of Appeals was wrong on this point as well.
The actual language from Brown v. Texas, upon which the Michigan courts based their evaluation of “effectiveness,” describes the balancing factor as “the degree to which the seizure advances the public interest.” 443 U. S., at 51. This passage from Brown was not meant to transfer from politically accountable officials to the courts the decision as to which among reasonable alternative law enforcement techniques should be employed to deal with a serious public danger. Experts in police science might disagree over which of several methods of apprehending drunken drivers is preferrable as an ideal. But for purposes of Fourth Amendment analysis, the choice among such reasonable alternatives remains with the governmental officials who have a unique understanding of, and a responsibility for, limited public resources, including a finite number of police officers. Brown’s rather general reference to “the degree to which the seizure advances the public interest” was derived, as the opinion makes clear, from the line of cases culminating in Martinez-Fuerte, supra. Neither Martinez-Fuerte nor Delaware v. Prouse, 440 U. S. 648 (1979), however, the two cases cited by the Court of Appeals as providing the basis for its “effectiveness” review, see 170 Mich. App., at 442, 429 N. W. 2d, at 183, supports the searching examination of “effectiveness” undertaken by the Michigan court.
In Delaware v. Prouse, supra, we disapproved random stops made by Delaware Highway Patrol officers in an effort to apprehend unlicensed drivers and unsafe vehicles. We observed that no empirical evidence indicated that such stops would be an effective means of promoting roadway safety and said that “[i]t seems common sense that the percentage of all drivers on the road who are driving without a license is very small and that the number of licensed drivers who will be stopped in order to find one unlicensed operator will be large indeed.” Id., at 659-660. We observed that the random stops involved the “kind of standardless and unconstrained discretion [which] is the evil the Court has discerned when in previous cases it has insisted that the discretion of the official in the field be circumscribed, at least to some extent.” Id., at 661. We went on to state that our holding did not “cast doubt on the permissibility of roadside truck weigh-stations and inspection checkpoints, at which some vehicles may be subject to further detention for safety and regulatory inspection than are others.” Id., at 663, n. 26.
Unlike Prouse, this case involves neither a complete absence of empirical data nor a challenge to random highway stops. During the operation of the Saginaw County checkpoint, the detention of the 126 vehicles that entered the checkpoint resulted in the arrest of two drunken drivers. Stated as a percentage, approximately 1.6 percent of the drivers passing through the checkpoint were arrested for alcohol impairment. In addition, an expert witness testified at the trial that experience in other States demonstrated that, on the whole, sobriety checkpoints resulted in drunken driving arrests of around 1 percent of all motorists stopped. 170 Mich. App., at 441, 429 N. W. 2d, at 183. By way of comparison, the record from one of the consolidated cases in Martinez-Fuerte showed that in the associated checkpoint, illegal aliens were found in only 0.12 percent of the vehicles passing through the checkpoint. See 428 U. S., at 554. The ratio of illegal aliens detected to vehicles stopped (considering that on occasion two or more illegal aliens were found in a single vehicle) was approximately 0.5 percent. See ibid. We concluded that this “record . . . provides a rather complete picture of the effectiveness of the San Clemente checkpoint,” ibid., and we sustained its constitutionality. We see no justification for a different conclusion here.
In sum, the balance of the State’s interest in preventing drunken driving, the extent to which this system can reasonably be said to advance that interest, and the degree of intrusion upon individual motorists who are briefly stopped, weighs in favor of the state program. We therefore hold that it is consistent with the Fourth Amendment. The judgment of the Michigan Court of Appeals is accordingly reversed, and the cause is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Statistical evidence incorporated in Justice Stevens’ dissent suggests that this figure declined between 1982 and 1988. See post, at 460-461, n. 2, and 467-468, n. 7 (citing U. S. Dept, of Transportation, National Highway Traffic Safety Administration, Fatal Accident Reporting System 1988). It was during this same period that police departments experimented with sobriety checkpoint systems. Petitioners, for instance, operated their checkpoint in May 1986, see App. to Pet. for Cert. 6a, and the Maryland State Police checkpoint program, about which much testimony was given before the trial court, began in December 1982. See id, at 84a. Indeed, it is quite possible that jurisdictions which have recently decided to implement sobriety checkpoint systems have relied on such data from the 1980’s in assessing the likely utility of such checkpoints.
Question: What type of decision did the court make?
A. opinion of the court (orally argued)
B. per curiam (no oral argument)
C. decrees
D. equally divided vote
E. per curiam (orally argued)
F. judgment of the Court (orally argued)
G. seriatim
Answer:
|
songer_geniss
|
A
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis. Consider the following categories: "criminal" (including appeals of conviction, petitions for post conviction relief, habeas corpus petitions, and other prisoner petitions which challenge the validity of the conviction or the sentence), "civil rights" (excluding First Amendment or due process; also excluding claims of denial of rights in criminal proceeding or claims by prisoners that challenge their conviction or their sentence (e.g., habeas corpus petitions are coded under the criminal category); does include civil suits instituted by both prisoners and callable non-prisoners alleging denial of rights by criminal justice officials), "First Amendment", "due process" (claims in civil cases by persons other than prisoners, does not include due process challenges to government economic regulation), "privacy", "labor relations", "economic activity and regulation", and "miscellaneous".
UNITED STATES v. SORCEY.
No. 8848.
Circuit Court of Appeals, Seventh Circuit.
Nov. 17, 1945.
Rehearing Denied Dec. 7, 1945.
Eugene J. Sullivan and Royal M. Galvin, both of. Milwaukee, Wis., for appellant.
Timothy T. Cronin and E. J. Koelzer, U. S. Atty., both of Milwaukee, Wis., for appellee.
Before EVANS, SPARKS, and KERN-ER, Circuit Judges.
KERNER, Circuit Judge.
Defendant appeals from a judgment rendered on a verdict of guilty upon an indictment in four counts. The first three counts charged him and Martin King, Dominick Rizzo, Anthony Cicerello, and Sebastian Vermiglio with possessing, selling and transferring, and with intent to sell and transfer or otherwise use, certain United States Federal Reserve notes in violation of 18 U.S.C.A. §§ 264, 265, and 268. The fourth count charged the defendant with conspiring with others to commit an offense against the United States by unlawfully possessing, receiving, exchanging, transferring and using with intent to defraud, falsely made, forged and counterfeit obligations of the United States in violation of 18 U.S.C.A. § 88.
At the trial the evidence for the Government consisted of the testimony of James Carter, an accomplice, four treasury department agents, a Chicago police officer, and several other witnesses. From the evidence the jury might have found the following facts: Sometime in 1944, Carter, Sorcey, and one Volpe formed a partnership to operate a tavern. The license was granted to Volpe. Carter obtained a bartender’s license and managed the tavern, but because of Carter’s criminal record the license was revoked, and on July 1, 1944, Sorcey bought Carter’s interest in the tavern.
On June 26, 1944, Sorcey and King called Carter into the back room of the tavern, told him that they had some “queer,” that is, counterfeit money, and wanted to know if he knew anyone who would buy it. King produced ten or twelve $20 bills, saying some of them were phony, and Sorcey showed him a couple of “hundred dollar” counterfeit bills. On August 9 Sorcey told him, “Cokie Joe (defendant Cicerello) is over in Chicago,” “he is passing those phoney bills like a house afire,” and “He wants you to go with him.” July 11, Vermiglio gave Carter fifteen $20 counterfeit bills and told him to call Sorcey. Carter, Sorcey, and Cicerello met the next morning and Sorcey gave Carter additional counterfeit bills, and thereafter Carter and Cicerello drove to several cities in Indiana and passed the $20 bills. One of the bills was passed by Cicerello in a restaurant operated by a Mrs. Kirkpatrick in Chicago, Illinois. On the return trip Carter was arrested at Chicago and eight of the $20 counterfeit bills were found on his person.
Sorcey did not take the stand, and the evidence against him consisted principally of Carter’s testimony as to what passed between him and defendant and the testimony of treasury department agents who testified as to conversations between Sorcey and Carter, as well as to his conduct after Carter’s arrest. Under this state of the record, there can be no question of the sufficiency of the evidence; consequently, defendant’s motion for a directed verdict was properly overruled. Caminetti v. United States, 242 U.S. 470, 495, 37 S.Ct. 192, 61 L.Ed. 442, L.R.A. 1917F, 502, Ann.Cas.1917B 1168.
Defendant complains of the refusal to give a requested instruction on the weight to be accorded the testimony of an accomplice. We find no merit in this contention.
There is no requirement that any specifically framed charge be given if the general charge includes fair, comprehensive instructions upon the subject-matter involved, and in framing a charge upon the elements bearing upon credibility of witnesses, the court is not to be bound to a hard and fast formula as to each and every phase of his charge. Wainer v. United States, 7 Cir., 82 F.2d 305, and United States v. Pape, 2 Cir., 144 F.2d 779, 781. Here, the record reveals that Carter was not only an accomplice, but it also showed that he had been convicted of a felony. The court told the jury that the testimony of a witness who has been convicted of a crime may not be as worthy of belief as one who has never been convicted and that his testimony -should be taken with caution. It called attention to the witness’s testimony as to the part he had played in violating the law, and instructed the jury to scrutinize carefully this evidence in determining the weight and credit to be given it. Thus it is clear that the court warned the jury against conviction upon the testimony of an accomplice. Jelke v. United States, 7 Cir., 255 F. 264, 283.
Defendant also contends that the court erred in failing to incorporate in its instructions on circumstantial evidence an instruction that the facts proved must be incompatible with innocence and incapable of explanation upon any other reasonable theory than that of guilt, and that it is not sufficient that they coincide with and render probable the guilt of the accused, but they must exclude every other reasonable hypothesis of innocence.
This was not a case where guilt depended entirely upon circumstantial evidence. Nevertheless, the court in its instruction said: “To warrant a conviction on circumstantial evidence, each fact necessary to the conclusion of guilt must be proved by competent evidence beyond a reasonable doubt, and all the facts so proven must be consistent with each other and with the main facts to be proven, and the circumstances taken together must be of a conclusive nature and producing, in effect, a reasonable and moral certainty beyond a reasonable doubt that the accused committed the offense charged.” In this situation we perceive no error in refusing to instruct the jury as requested. Caminetti v. United States, supra; Estabrook v. United States, 8 Cir., 28 F.2d 150; United States v. Austin-Bagley Corp., 2 Cir., 31 F.2d 229; Corbett v. United States, 8 Cir., 89 F.2d 124; and Beckman v. United States, 5 Cir., 96 F.2d 15.
The facts concerning the claimed error in recalling the jury for further instruction are these: After the jury had been deliberating for some time, the court recalled the jury and said, “I would like to ask you, Mr. Foreman, if there is any particular item which you desire further instructions on or whether you think that further deliberation might result in a verdict.” To this inquiry the foreman replied that the jury had completed part of the decisions and the rest would be completed in a short period of time, whereupon the court said: “I want to impress upon you the great importance on having this jury reach a verdict. This is a long and expensive trial and expensive to the defendants and to the government. I don’t think any other twelve people would have any more intelligence or be able to consider the matter any better than you can do. It would only necessitate another trial if you did not reach a verdict, and while, as I said before, if you have reasonable doubts, why, it is, of course, your duty to maintain them, but at the same time you should also listen, if you are in disagreement * * * to the arguments of those who may seem to be in the majority, to see if you might not have overlooked something in the evidence that didn’t come readily to your mind. * * * I don’t want to unduly prolong your deliberations, but I do feel that it would be necessary, if you didn’t agree, to keep you together for some several hours yet.”
Now, defendant contends that the court’s remarks were coercive and prejudicial, citing State v. Fisher, 23 Mont. 540, 59 P. 919; State v. Clark, 38 Nev. 404, 149 P. 185; and Potard v. State, 140 Neb. 116, 299 N.W. 362.
The first two of these cases are clearly distinguishable on the facts, and while the Potard case seems tobe applicable, we think the better rule and reasoning may be found in Allis v. United States, 155 U.S. 117, 15 S.Ct. 36, 39 L.Ed. 91; and United States v. McGuire, 2 Cir., 64 F.2d 485. In the Allis case, supra, 155 U.S. 123, 15 S.Ct. 38, 39 L.Ed. 91, the court said: “It is a familiar practice to recall a jury, after they have been in deliberation for any length of time, for the purpose of ascertaining what difficulties they have in the consideration of the case, and of making proper efforts to assist them in the solution of those difficulties. It would be startling to have such action held to be error, and error sufficient to reverse a judgment. The time at which such a recall shall be made, if at all, must be left to the sound discretion of the trial court, * *
We think that what was said in the case of Dwyer v. United States, 2 Cir., 17 F.2d 696, 698, is appropriate here. “If the whole episode be viewed as an entirety, we are unable to perceive that it had any tendency to coerce the jury or to treat any accused with unfairness. Coercion, as distinguished from duress, has often been called a moral wrong. There can be no wrong in reminding a body of jurors of their duty to exercise intelligence and listen to reason, and that was all that was done in the present instance.”
We do not wish it understood that we approve that part of the instruction in which the jurors were told that if they did not agree, it would be necessary to keep them “together for some several hours yet,” but in the light of all the evidence, instructions and other matters properly of record, we think the action of the court should be treated as harmless.
Defendant also contends that the court improperly participated in the trial of the case and imposed an unusually harsh sentence.
It is asserted that the remarks of the court about the length of the cross-examination were prejudicial to defendant. Five .attorneys represented the defendants on trial. The court on several occasions suggested that the cross-examination was “long and drawn out” and that counsel were going over the same matter three or four times. We can’t say this constitutes reversible error.
As to the court’s participation in the trial, the facts are that when Carter was called to testify, he answered, “I can’t hear you,” and thereafter frequently indicated he had difficulty in hearing the questions. Thereupon the court said: “Speak loud when you talk to the witness.” “All of you speak so quietly that I don’t think this witness will be able to hear unless you make .an effort to put on a little extra horsepower.” “Don’t go dropping your voice so that I can’t even hear you. How do you expect he is going to hear it?”
The argument is that it was the sole province of the jury to resolve the issue of whether Carter could hear the questions properly, and his actions and demean- or should have been considered by the jury in determining his credibility, without the court obtruding his opinion on the question of Carter’s ability to hear the questions. The argument and contention is absolutely void of any merit.
Defendant insists that the penalty imposed when compared with those given the other defendants was extremely harsh. Defendant was sentenced to serve terms of seven years each on the first three counts and two years on the fourth count, the sentences to run concurrently.
The fixing of penalties for crimes is a legislative function. What constitutes an adequate penalty is a matter of legislative judgment and discretion, and the courts will not interfere therewith unless the penalty is clearly and manifestly cruel and unusual, Moore v. Aderhold, 10 Cir., 108 F.2d 729, and where the sentence imposed is within the limits prescribed by the statute for the offense committed, it ordinarily will not be regarded as cruel and unusual, Schultz v. Zerbst, 10 Cir., 73 F.2d 668. The sentences in this case were well within the maximum statutory penalties. In such a situation, we may not disturb a judgment fixing such penalties because only of the seeming severity of the sentence. Bailey v. United States, 7 Cir., 284 F. 126.
Defendant’s final attack upon the judgment is based upon the refusal of the court to grant a new trial because the bailiff in charge of the jury communicated with the jury.
In the consideration of defendant’s contention we note that the record discloses that after the supplemental instructions heretofore discussed had been given to the jury they retired for further deliberations, and after the jury had agreed on verdicts of guilty as to all of the defendants on trial, and while the foreman was signing the form of verdicts to be returned, the bailiff came to the door of the judge’s chambers and informed him that the jury wanted to know whether all the counts had to be accounted for — whether they had to pass on all counts in the indictment. The court directed the bailiff to tell the jury "yes” and they were so informed. At the time of this occurrence all counsel for defendants were in the chambers, and the judge informed them of the jury’s request and of the directions he had given to the bailiff. Counsel were asked “if they had any objection to the procedure, * * To the court’s inquiry, neither counsel for defendant, nor the attorney for the other defendants made an objection, but each remained silent.
To be sure, the jury should pass upon each case free from external causes tending to disturb the exercise of deliberate and unbiased judgment, hence, communications, between jurors and third persons or officers in charge of the jury, are absolutely forbidden, and, if it appears that such communications have taken place, a presumption arises that they were prejudicial, but this presumption may be rebutted by evidence, Wheaton v. United States, 8 Cir., 133 F.2d 522. But, we must not permit the integrity of the jury to be assailed by mere suspicion and surmise; it is presumed that the jury will be true to their oath and conscientiously observe the instructions of the court, Baker v. Hudspeth, 10 Cir., 129 F.2d 779, 782. And where, upon a motion for a new trial, it is claimed that communications have taken place and competent evidence is offered in substantiation of the claim, it is the duty of the trial court to hear and consider it, and when it does so, and decides the motion thereon, its decision is reviewable for abuse of discretion only. Wheaton v. United States, supra, and Ray v. United States, 8 Cir., 114 F.2d 508. Applying the tests required by the cases cited, the question is whether the court abused its discretion. We think it did not.
The judgment of the District Court will be affirmed. It is so ordered.
Question: What is the general issue in the case?
A. criminal
B. civil rights
C. First Amendment
D. due process
E. privacy
F. labor relations
G. economic activity and regulation
H. miscellaneous
Answer:
|
songer_respond1_3_2
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Your task is to determine which category of federal government agencies and activities best describes this litigant.
Frank SHAPIRO, Plaintiff-Appellant, v. Abraham RIBICOFF as Secretary of Health, Education & Welfare of the United States of America, Defendant-Appellee.
No. 319, Docket 28093.
United States Court of Appeals Second Circuit.
Submitted March 11, 1963.
Decided April 17, 1963.
Frank Shapiro, plaintiff-appellant, appearing pro se.
Arthur S. Olick, Asst. U. S. Atty., Southern District of New York (Robert M. Morgenthau, U. S. Atty., on the brief), for defendant-appellee.
Before MOORE, FRIENDLY and SMITH, Circuit Judges.
MOORE, Circuit Judge.
This case came before us on a motion to dismiss the appeal because of the appellant’s failure to prosecute the same. We denied the motion and, with the approval of both parties, decided to hear the appeal on the basis of the record in the district court. The appeal is taken by the plaintiff below from a judgment on the pleadings in defendant’s favor entered in the United States District Court for the Southern District of New York on April 10, 1962.
Plaintiff, suing pro se and as a poor person, brought the action under Section 205(g) of the Social Security Act, as amended, 42 U.S.C. § 405(g), to review a final decision of the Secretary of Health, Education and Welfare which denied the plaintiff old-age insurance benefits for any period prior to November, 1953, because it was not until that month that plaintiff earned his sixth and qualifying quarter of coverage requisite to statutory status as a “fully insured” person. 42 U.S.C. § 414(a) (2). The amount in question is $360 plus interest, representing $30 a month from April 10, 1954 to April 10, 1955. Plaintiff claims he is entitled to this amount because he should have been credited with “wages” earned in May or June 1953 in connection with his alleged employment by a Madame Duprey, the proprietress of a dress shop. The hearing examiner found that the services performed for Madame Du-prey were not performed in the course of an employer-employee relationship but were those of an independent contractor and did not constitute wages (42 U.S.C. §§ 409, 410(a), 410 (k) (2)), and that, in any event, actual payments for such services were not received until November 1955 so that such remuneration could not be allocated to the quarters in which appellant claims it should have been paid.
In determining whether services are rendered as an employee or as an independent contractor, the factor of the right to control not only the result, but also the details of performance, is of considerable importance. Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Higgins, 189 F.2d 865 (2d Cir. 1951); Zipser v. Ewing, 197 F.2d 728 (2d Cir. 1952); Cody v. Ribicoff, 289 F.2d 394 (8th Cir. 1961); 20 C.F.R. No. 404.1004 (c). Also of importance are such factors as to the right to discharge, the furnishing of tools and work and the permanency of the relation. Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Higgins, supra; Cody v. Ribicoff, supra; 20 C.F.R. No. 404.1004(c).
The record of the proceedings before the hearing examiner indicates that appellant operated his own business as a dress contractor and pattern-maker in the ladies clothing industry and maintained a small factory employing between two and five people for that purpose. He met Duprey, a custom dressmaker, as the result of an advertisement in a trade publication and the two explored the possibility of becoming partners in the manufacture of ladies dresses. The partnership never materialized but when Duprey opened her own dressmaking shop she engaged the plaintiff to make some patterns for her. Plaintiff contended before the examiner that he was to be paid for this work on an hourly basis but in subsequent litigation over payment for these services he claimed that Duprey agreed to pay him $150 for this pattern work.
The services were performed at Du-prey’s place of business but appellant supplied his own tools and equipment. These services were supplied only as Du-prey required them for particular dresses and were performed only in appellant’s “off” hours and at his own convenience. At the time he performed these services for Duprey, appellant performed the same and similar services for other customers, both at his factory and the customer’s place of business. As to the nature of his services, Duprey would show him a picture or drawing of a dress and provide him the measurements and material but exercised no control over the work performed by appellant. From this brief review of the record and the applicable standards, it is clear that the Secretary’s determination is based on substantial evidence and is therefore conclusive. 42 U.S.C. § 405(g); Dondero v. Celebreeze, 2d Cir., 312 F.2d 677; Newman v. Celebreeze, 2d Cir., 310 F.2d 780; Poss v. Ribicoff, 289 F.2d 10 (2d Cir., 1961), cert. denied, 368 U.S. 902, 82 S.Ct. 178, 7 L.Ed.2d 96 (1962).
Affirmed.
. This litigation terminated in a settlement whereby appellant received $125 ($50 of this to his attorney) on November 14, 1955. This is the amount appellant contends should have been credited to him for the year 1953.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Which category of federal government agencies and activities best describes this litigant?
A. cabinet level department
B. courts or legislative
C. agency whose first word is "federal"
D. other agency, beginning with "A" thru "E"
E. other agency, beginning with "F" thru "N"
F. other agency, beginning with "O" thru "R"
G. other agency, beginning with "S" thru "Z"
H. Distric of Columbia
I. other, not listed, not able to classify
Answer:
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songer_applfrom
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J
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What follows is an opinion from a United States Court of Appeals. Your task is to identify the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court).
In re MULTIDISTRICT VEHICLE AIR POLLUTION M.D.L. NO. 31. STATE of CALIFORNIA et al., Appellees, v. AUTOMOBILE MANUFACTURERS ASSOCIATION, INC., et al., Appellants. Robert MORGAN, Appellee, v. AUTOMOBILE MANUFACTURERS ASSOCIATION, INC., et al., Appellants. CITY OF PHILADELPHIA et al., Appellees, v. AUTOMOBILE MANUFACTURERS ASSOCIATION, INC., et al., Appellants. STATE of NEW YORK, Appellee, v. AUTOMOBILE MANUFACTURERS ASSOCIATION, INC., et al., Appellants. CITY OF NEW YORK et al., Appellees, v. AUTOMOBILE MANUFACTURERS ASSOCIATION, INC., et al., Appellants. CITY AND COUNTY OF DENVER, Appellees, v. AMERICAN MOTORS CORPORATION et al., Appellants.
No. 71-1241.
United States Court of Appeals, Ninth Circuit.
June 4, 1973.
See also, D.C., 52 F.R.D. 398.
Robert L. Stern (argued), of Mayer, Brown & Platt, Chicago, 111., Lloyd N. Cutler (argued), of Wilmer, Cutler & Pickering, Washington, D. C., Walter J. Williams, Detroit, Mich., Forrest A. Hainline, Jr., of Cross, Wrock, Miller & Vieson, Ross L. Malone, Robert A. Nitsehke, of General Motors, Detroit, Mich., Richard C. Warmer, of O’Melveny & Myers, Julian O. Von Kalinowski, of Gibson, Dunn,-& Crutcher, G. William Shea, Philip K. Verleger, Jack D. Fudge, David A. Destino, of McCutchen, Black, Verleger & Shea, Carl J. Schuck, of Overton, Lyman & Prince, Marcus Matt-son, of Lawler, Felix & Hall, Carla H. Hills, Atty., of Munger, Tolies, Hills & Rickershauser, Harvey M. Grossman, of Pacht, Ross, Warne, Bernhard & Sears, Los Angeles, Cal., Kirkland, Ellis, Hodson, Chaffetz & Masters, Chicago, 111., Alan N. Halkett, of Latham & Watkins, Los Angeles, Cal., John H. Schafer, III, of Covington & Burling, Washington, D. C., for appellants.
David Berger (argued), Philadelphia, Pa., George C. Mantzoros, Asst. Atty. Gen. (argued), New York City, David I. Shapiro (argued), of Dickstein, Shapiro & Galligan, Washington, D. C., Evelle J. Younger, Atty. Gen., Los Angeles, Cal., Ronald Bloomfield, Atty. Gen., New York City, Anthony C. Joseph, Herbert Davis, Ellen Friedman, Deputy Attys. Gen., Los Angeles, Cal., Edward G. Bauer, Jr., City Sol., Philadelphia, Pa., Max P. Zall, City Atty., Denver, Colo., J. Lee Rankin, Corp. Counsel for the City of New York, Norman Redlich, First Asst. Corp. Counsel, New York City, Harold E. Kohn, Bruce W. Kauffman, Edward F. Mannino, John M. Elliott, of Dilworth, Paxson, Kalish, Levy & Coleman, Herbert B. Newberg, H. Laddie Montague, Jr., Philadelphia, Pa., Perry Goldberg, Chicago, 111., Leo T. Zuckerman, Denver, Colo., Jerome S. Wagshal, of Dickstein, Shapiro & Galligan, George Kauffman, Washington, D. C., for appellees.
Before HAMLIN, BROWNING and ELY, Circuit Judges.
OPINION
ELY, Circuit Judge:
This certified interlocutory appeal under 28 U.S.C. § 1292(b) arises from pretrial proceedings in Multidistrict Air Pollution Control Litigation (C.D.Cal. M.D.L. 31), which is a consolidation of numerous actions under 28 U. S.C. § 1407. In re Motor Vehicle Air Pollution Control Equipment, 311 F. Supp. 1349 (Jud. Panel Mult. Lit. 1970.) Since this appeal is from denial of motions to dismiss, factual allegations are east most favorably to the appellees. See Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L.Ed.2d 80 (1957).
As early as 1953, the nation’s automobile manufacturers and their trade association allegedly conspired to eliminate competition among themselves in the research, development, manufacture, installation and patenting of automotive air pollution control devices. Appellees urge that this horizontal antitrust conspiracy was motivated: (1) by appellants’ conviction that antipollution devices are externalities, whose development would increase price without concomitant spur to consumer interest; (2) by the apprehension that the first competitor to perfect such a device would garner exclusive contracts with governmental purchasers; and (3) by the fear that technological realization of the devices would prompt laws compelling their use.
Appellees argue that this conspiracy inflicted financial losses that would not have occurred but for the conspiracy-induced absence of antipollution equipment. Governmental entity appellees claim losses resulting from diminution in value of, and expenditures in connection with, government property and interests. Crop farmer appellees assert direct damage to crop yields. Variously proceeding in their individual capacities, as parens patriae and as class representatives, all appellees seek treble damages and equitable relief under sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26.
On appeal, appellants challenge the District Court’s rulings that appellees have standing to sue under sections 4 and 16 of the Clayton Act, that certain appellees may proceed as parens patriae, and that others may proceed as class representatives under Fed.R.Civ.P. 23.
1. STANDING UNDER SECTION 4
Appellees ground their claims for treble damages on section 4 of the Clayton Act, 15 U.S.C. § 15, which reads:
“Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit including a reasonable attorney’s fee.”
Read literally, this statute could afford relief to all persons whose injuries are causally related to an antitrust violation. Recognizing the nearly limitless possibilities of such an interpretation, however, the judiciary quickly brushed aside this construction. Instead, a measured approach has prevailed; ¿ourts have impressed a standing doctrine so as to confine the availability of section 4 relief only to those individuals whose protection is the fundamental purpose of the antitrust laws. Cf. Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970); Association of Data Processing v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970); Mount Clemens Industries, Inc. v. Bell, 464 F.2d 339, 341-344 (9th Cir. 1972). Unfortunately, no “bright line” has yet emerged to divine this group, and courts have formulated varied definitions.
In this case, however, the District Court declined to apply any of the extant definitions, choosing instead to expand the coverage of section 4:
“We are now concerned with the phrase ‘injured in his business or property by reason of anything forbidden in the antitrust laws’ in the light of the allegations of these complaints, rather than the traditional, legalistic approach defined by the eases cited by defendants in their motion to dismiss. Each of the plaintiffs allege injury to their respective business or property by reason of anti-trust violations of the defendants.
“Plaintiffs may fail in their proof, but until then, they should be given the benefit of employing ‘any available remedy to make good the wrong done.’ ” [footnote citing J. I. Case Co. v. Borak, 377 U.S. 426, 433, 84 S. Ct. 1555, 12 L.Ed.2d 423 (1964); Bell v. Hood, 327 U.S. 678, 684, 66 S.Ct. 773, 90 L.Ed. 939 (1946)].
52 F.R.D. 398, 401 (C.D.Cal.1970). In the aftermath of the Supreme Court’s recent decision in Hawaii v. Standard Oil Co., 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972), however, we cannot so easily disregard the so-called “traditional, legalistic approach” of the cases.
Judicial constructions of standing under section 4 have keyed on the phrases “business or property” and “by reason of” as indicating twin requisites for standing. First, a plaintiff must allege injury to his “business or property”, a term definitively limited to interests in commercial ventures or enterprises : “the words ‘business or property’ . . . refer to commercial interests or enterprises.” Hawaii, supra at 264, 92 S.Ct. at 892. See Control Data Corp. v. IBM, 306 F.Supp. 839, 845 (D.Minn.1969) (corporate plaintiff not in legal existence at time of antitrust violation is without commercial injury). Secondly, a plaintiff must allege that the injury suffered was occasioned “by reason of” an antitrust violation. Hawaii, supra at 263-264 n.14, 92 S.Ct. 885.
Applying the first predicate, since neither the government’s individual claims, nor their class claims, nor their parens patriae claims allege any injury to commercial ventures or enterprises, the governmental entities cannot seek recovery under section 4 of the Clayton Act. In contrast, the farmers satisfy the first requisite, since a diminished crop yield, for example, would constitute injury to commercial interests.
Application of the second prong of the standing formulation is more difficult since “by reason of” has consistently eluded efforts at uniform definition or application. Compare, e. g., Mulvey v. Samuel Goldwyn Productions, 433 F.2d 1073 (9th Cir. 1970) with, Fields Productions, Inc. v. United Artists Corp., 432 F.2d 1010 (2d Cir. 1970), aff’g, per curiam 318 F.Supp. 87 (S.D.N.Y.1969), cert. denied, 401 U.S. 949, 91 S.Ct. 932, 28 L.Ed.2d 232 (1971); and compare Steiner v. 20th Century-Fox Film Corp., 232 F.2d 190 (9th Cir. 1956) and Congress Building Corp. v. Loew’s, Inc., 246 F.2d 587 (7th Cir. 1957) with Melrose Realty Co. v. Loew’s, Inc., 234 F.2d 518 (3d Cir.), cert. denied, 352 U.S. 890, 77 S.Ct. 128, 1 L.Ed.2d 85 (1956) and Harrison v. Paramount Pictures, Inc., 115 F. Supp. 312 (E.D.Pa.1953), aff’d, 211 F.2d 405 (3 Cir.), cert. denied, 348 U.S. 828, 75 S.Ct. 45, 99 L.Ed. 653 (1954); and compare Volasco Products Co. v. Lloyd A. Fry Roofing Co., 308 F.2d 383 (6th Cir. 1962), cert. denied, 372 U.S. 907, 83 S.Ct. 721, 9 L.Ed.2d 717 (1963) with South Carolina Council of Milk Producers, Inc. v. Newton, 360 F.2d 414 (9th Cir.), cert. denied, 385 U.S. 934, 87 S.Ct. 295, 17 L.Ed.2d 215 (1966). The resulting confusion prompted speculation that the Supreme. Court would disapprove judicial application of “by reáson of” to limit potential antitrust claimants. In Hawaii, however, the Court appeared to approve the standing doctrine to require more from a would-be plaintiff than some remote connection in the causal chain.
“The lower courts have been virtually unanimous in concluding that Congress did not intend the antitrust laws to provide a remedy in damages for all injuries that might conceivably be traced to an antitrust violation.”
405 U.S. at 263 n.14, 92 S.Ct. at 891-892. Although the Court cited cases in support from every circuit, it failed to distinguish essentially two disparate analytical techniques — the “direct injury” and the “target area approaches— employed by different circuits.
Courts adhering to the “direct injury” test focus principally on the relationship between the alleged antitrust violator and the claimant. Generally, if the claimant is separated from the violator by an intermediate antitrust victim, standing is denied by attaching conclusory labels such as “remote”, “indirect”, and “consequential”. Resurrecting notions of privity, this test thus arbitrarily forecloses otherwise meritorious claims simply because another antitrust victim interfaces the relationship between the claimant and the alleged violator. Moreover, the “direct injury” requirement has engendered among some adherents a regrettable tendency to deny standing to any plaintiff who happens to fall within certain talismanic rubrics: “creditor”, “landlord”, “lessor”, “franchisor”, “supplier”. This disposition is, we think, unsatisfactory insofar as it transforms judicial inquiry into a mere search for labels.
In contrast, courts employing the “target area” approach focus on claimant’s relationship to the area of the economy allegedly injured by the defendant.
“[T]o state a cause of action under the anti-trust laws a plaintiff must show more than that one purpose of the conspiracy was a restraint of trade and that an act has been committed which harms him. He must show that he is within that area of the economy which is endangered by a breakdown of competitive conditions in a particular industry. Otherwise he is not injured ‘by reason’ of anything forbidden in the anti-trust laws.”
Conference of Studio Unions v. Loew’s Inc., 193 F.2d 51, 54-55 (9th Cir. 1951), cert. denied, 342 U.S. 919, 72 S.Ct. 367, 96 L.Ed. 687 (1952). To attain standing, a plaintiff must thus allege that the antitrust violation injured a commercial enterprise of the plaintiff in the area of the economy in which the elimination of competition occurred. Standing is denied, on the other hand, if the claimant’s commercial activity occurred outside that area of the economy. See id. Hence the “target area” approach provides a logical and flexible tool for analyzing whether a particular claimant falls within the class of persons slated by Congress for protection under section 4 of the Clayton Act.
“[T]he basic and underlying purposes of the anti-trust laws [are] to preserve competition and to protect the consumer. Recovery and damages under the anti-trust law is available to those who have been directly injured by the lessening of competition and withheld from those who seek the windfall of treble damages because of incidental harm.”
Id. at 55. See Karseal Corp. v. Richfield Oil Corp., 221 F.2d 358, 365 (9th Cir. 1955).
The “direct injury” approach to section 4 was implicitly undermined by the Supreme Court in Perkins v. Standard Oil Co., 395 U.S. 642, 89 S.Ct. 1871, 23 L.Ed.2d 599 (1969), rev’g 396 F.2d 809 (9th Cir. 1968). Attention centered on whether “fourth level” price discrimination is proscribed by section 2 of the Clayton Act, as amended by section 13 of the Robinson-Patman Act, 15 U.S.C. § 13. A panel of our court, focusing on the indirect commercial relationship between claimant and defendant, had concluded in the negative:
“Section 2(a) of the Act does not recognize a causal connection, essential to liability, between a supplier’s price discrimination and the trade practices of a customer [removed four rungs] . on the distributive [sic] ladder . . . .”
396 F.2d at 816. In the Supreme Court’s reversing opinion, Mr. Justice Black admonished that this direct-indirect “limitation is wholly artificial and is unwarranted by the language or purpose of the Act.” He reasoned that “the competitive harm done ... is certainly no less because of the presence of an additional link in this particular distribution chain from the producer to the retailer.” 395 U.S. at 648, 89 S.Ct. at 1874. Though applying a different section of the Clayton Act, the opinion argues forcefully by analogy against “direct injury” analysis. The Court eschewed consideration of the nexus between claimant and defendant and concentrated instead on the nature of the “competitive harm”.
Direct support of the “target area” approach also emerges from the Supreme Court’s opinion in Perkins, supra. The plaintiff had appended an auxiliary claim under section 4 for injuries allegedly suffered in his individual capacities as creditor, landlord, and broker. In constructing its analytical framework, our court unfortunately — but quite understandably — indiscriminately j uxtaposed cases espousing both the “direct injury” and the “target area” tests. We resurrected-notions of privity, and, attaehing the determinative “lessor” label, concluded that the plaintiff’s claim was comprised of elements not “properly the subject of damages.” 396 F.2d at 815. The Supreme Court’s reversal was grounded solely on a “target area” quotation from Karseal Corp. v. Richfield Oil Corp., 221 F.2d 358, 363 (9th Cir. 1955) that the Court applied consistently with its disposition of the section 2 issue. The Court avoided any categorical characterization of claimant as, for example, a “lessor” or a “creditor”, and affirmed the propriety of section 4 relief by emphasizing the economic impact of the anticompetitive conduct.
Perkins therefore clarifies any ambiguity inhering in Hawaii’s failure to adopt expressly either of the two predominant judicial glosses on the language “by reason of”. By repudiating all those aspects of the “direct injury” test that distinguish it from the “target area” approach, and by embracing and applying the latter, the Court in Perkins, at least inferentially, impresses its imprimatur upon the “target area” approach articulated by this court: a plaintiff has standing under section 4 of the Clayton Act if the claimed losses fall “within that area of the economy which is endangered by a breakdown of competitive conditions in a particular industry.” E. g., Mulvey v. Samuel Goldwyn Productions, 433 F.2d 1073 (9th Cir. 1970) ; Hoopes v. Union Oil Co., 374 F. 2d 480, 485 (9th Cir. 1967); Karseal Corp. v. Richfield Oil Corp., 221 F.2d 358 (9th Cir. 1955); Conference of Studio Unions v. Loew’s Inc., 193 F. 2d 51 (9th Cir. 1951), cert. denied, 342 U.S. 919, 72 S.Ct. 367, 96 L.Ed. 687 (1952). A proper application of “by reason of” focuses on whether the anti-competitive conduct directed against an area of the economy injured business operations conducted by the claimant in that sector of the economy. The resulting two-step approach first requires identification of the affected area of the economy and then the ascertainment of whether the claimed injury occurred within that area.
Here the crop farmers’ complaint alleges that the automobile manufacturers conspired
“(a) To eliminate all competition among the automobile manufacturers in the research, development, manufacture and installation of motor vehicle air pollution equipment;
“(b) To eliminate competition . . . in the purchase of patents and patent rights from other parties covering motor vehicle air pollution equipment.”
It is manifest from these averments that the area of the economy against which anticompetitive conduct was allegedly directed was that concerned with research, development, manufacture, installation and patenting of automotive air pollution control devices. No commercial interest of the crop farmers falls within this area. Not only were the crop farmers not targets of the alleged conspiracy, they were not even on the firing range. Accordingly, the farmers lack standing under section 4 of the Clayton Act, to maintain this action. Upon remand, therefore, all actions arising under section 4 will be dismissed.
Insofar as the common weal was injured the federal- government was the proper party to seek redress; and, in fact, it attempted to do so. See Note 1, swpra. If the Government did not prosecute its action with sufficient vigor, the remedy lies in executive or legislative reform, not in judicial overreaching.
11. STANDING UNDER SECTION 16
Appellees’ claims for injunctive relief are based on section 16 of the Clayton Act, 15 U.S.C. § 26, which reads in relevant part:
“Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity, under the rules governing such proceedings . . . .”
As the Court noted in Hawaii, supra, 405 U.S. at 260, 92 S.Ct. 885, 31 L.Ed.2d 184, this section varies significantly from section 4 insofar as the broader language of section 16 lacks mention of “business or property”, an omission signalling different standing requirements. This treatment is fully justified by the difference between the remedies available under each section. In contrast to section 4, section 16 does not involve punitive and potentially disastrous judgments for treble damages and attorneys’ fees; neither is there the potential threat of duplicative recoveries. See Hawaii, supra at 261-264. Consequently, courts have not exercised the same pronounced restraint in granting standing under section 16 as they have done under section 4. As we observed in Hawaii v. Standard Oil Co., 431 F.2d 1282, 1284-1285 (9th Cir. 1970), aff’d, 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972):
“[Section 16] is far broader than § 4. Any person may secure injunctive relief against threatened loss or damage by violation of the antitrust laws. Section 4 provides for recovery of treble damages only by a person injured in his business or property by [reason of] such a violation.”
Unlike standing under section 4, standing under section 16 does not require an injury to “commercial interests” but only an injury cognizable in equity. For example, housing segregations enforced by an antitrust conspiracy of realtors constitutes an injury to excluded minority members that confers standing for injunctive relief under section 16, see Bratcher v. Board of Realtors, 381 F.2d 723 (6th Cir. 1967), although not for treble damages under section 4. Since all appellees herein have alleged “threatened loss or damage” to interests cognizable in equity, they have standing to seek equitable protection under section 16 of the Clayton Act.
We emphasize that we now intimate no conclusions as to either the merits of the equitable claims or the availability of any form of injunctive relief. These issues must, in the first instance, be resolved by the District Court.
III. PARENS PATRIAE
At common law, the concept of parens patriae invested the English Sovereign with powers and duties — the “royal prerogative” — to protect certain interests of his subjects! See Hawaii, supra, 405 U.S. at 257-260, 92 S.Ct. 885. In this country the parens patriae function expanded somewhat and devolved upon the states that, to some extent, ceded it to the federal government. See Massachusetts v. Mellon, 262 U.S. 447, 485-486, 43 S.Ct. 597, 67 L.Ed. 1078 (1923); Public Utilities Commission v. United States, 356 F.2d 236, 241 n.1 (9th Cir.), cert. denied, 385 U.S. 816, 87 S.Ct. 35, 17 L.Ed.2d 54 (1966). Hence, the federal government and the states, as the twin sovereigns in our constitutional scheme, may in appropriate circumstances sue as parens patriae to vindicate interests of their citizens. E. g., Hawaii, supra; Georgia v. Pennsylvania Railroad Co., 324 U.S. 439, 65 S.Ct. 716, 89 L.Ed. 1051 (1945); North Dakota v. Minnesota, 263 U.S. 365, 44 S.Ct. 138, 68 L.Ed. 342 (1923); Pennsylvania v. West Virginia, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117 (1923); New York v. New Jersey, 256 U.S. 296, 41 S.Ct. 492, 65 L. Ed. 937 (1921); Georgia v. Tennessee Copper Co., 206 U.S. 230, 27 S.Ct. 618, 51 L.Ed. 1038 (1970); Kansas v. Colorado, 206 U.S. 46, 27 S.Ct. 655, 51 L.Ed. 956 (1907); Missouri v. Illinois, 180 U.S. 208, 21 S.Ct. 331, 45 L.Ed. 497 (1901); Louisiana v. Texas, 176 U.S. 1, 20 S.Ct. 251, 44 L.Ed. 347 (1900). On the other hand, political subdivisions such as cities and counties, whose power is derivative and not sovereign, cannot sue as parens patriae, although they might sue to vindicate such of their own proprietary interests as might be congruent with the interests of their inhabitants.
We have already concluded that, inasmuch as appellee states failed to allege any injury to their “commercial interests”, they lack standing qua parens patriae, or in any other capacity, to seek relief under section 4 of the Clayton Act. Moreover, our court has recently held that a state cannot sue as parens patriae under section 4 on behalf of its citizen-consumers for injuries suffered by them. California v. Frito-Lay, Inc., 474 F.2d 774 (9th Cir. 1973). Their parens patriae suit under section 16 of the Clayton Act, however, presents a separate but readily manageable issue.
In Georgia v. Pennsylvania Railroad Co., supra, the Supreme Court upheld Georgia’s parens patriae action under section 16 for an injunction against a conspiracy between large railroad companies. The analysis of that case rendered in Hawaii, supra, 405 U.S. at 259-260, 92 S.Ct. 885, bespeaks the continuing availability of parens patriae actions under section 16 for injunctive relief for injuries to a state’s economy. Insofar as the state appellees have alleged injury to their economies, they have standing under section 16. In reaffirming this principle, we quote the presaging language of Mr. Justice Holmes:
“[T]he State has an interest independent of and behind the title of its citizens, in all the earth and air within its domain. It has the last word as to whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air.
“It is a fair and reasonable demand on the part of a sovereign that the air over its territory should not be polluted . . that the forests on its mountains . . . should not be further destroyed or threatened . . . that the crops and orchards on its hills should not be endangered
206 U.S. at 237-38, 27 S.Ct. at 619.
IV. CLASS ACTIONS
In light of our determination that all appellees lack standing to seek antitrust damages, the District Court must reevaluate the propriety, under Fed.R.Civ.P. 23(b) (3), of the class actions for equitable relief. In addition, the court may need to examine the applicability of Fed.R.Civ.P. 23(b)(2). Both in anticipation of probable changes among the parties plaintiff, and in deference to the accumulated experience of district courts in framing classes under Rule 23, we deem it inappropriate at this juncture to comment further upon the class action issues.
' Affirmed in part; reversed and remanded in part.
. These are the progeny of a civil antitrust action filed by the federal government against the largest domestic automobile manufacturers and the Automobile Manufacturers’ Association. In October of 1969, the Government accepted a consent decree, United States v. Automobile Mfgrs. Ass’n, 307 F.Supp. 617 (C.D.Cal. 1969) aff’d per curiam sub nom. New York v. United States, 397 U.S. 248, 90 S.Ct. 1105, 25 L.Ed.2d 280 (1970), the text of which is reported in 1969 Trade Cas. ¶[72,907.
Similar factual claims were presented to the original jurisdiction of the Supreme Court in Washington v. General Motors Corp., 406 U.S. 109, 92 S.Ct. 1396, 31 L.Ed.2d 727 (1972). After the Court declined to assume jurisdiction in that case, and after this court accepted certification of the present appeal, an additional spate of actions was filed in the District Court under the multi-district tag-along procedures.
. Sucli compulsion would be unattractive to manufacturers insofar as required use of an externality would likely increase price while not necessarily increasing demand, thus diminishing overall product marketability and profit.
. See, e. g., Loeb v. Eastman Kodak Co., 183 F. 704 (3d Cir. 1910) (limiting standing under section 7 of the Sherman Act, predecessor of section 4 of the Clayton Act). Cf. Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 534, 38 S.Ct. 186, 62 L.Ed. 451 (1918) (Holmes, J.) '(“the endlessness and futility of the effort to follow every transaction to its ultimate result”). See also L. Green, The Rationale of Proximate Cause 122-23, 195-97 (1927); Pollock, The “Injury” and “Causation” Elements of a Treble-Damage Antitrust Action, 57 Nw.U.L.Rev. 691, 697-700 (1963).
. Even some commentators who have lauded the ingenuity of the district court’s decision recognize its clear departure from prior law. See, e. g., 12 B.C.Ind. & Com. LJEtev. 686 (1971) ; Note, 24 Vand.L.Rev. 126 (1970).
. See, e. g., Klingsberg, Bull’s Eyes & Carom Shots, XVI Antitrust Bull. 351, 368-69 (1971).
. We have employed the terms “target area” and “direct injury” only as convenient, shorthand methods of identifying the two major approaches to the interpretation of “by reason of”. Use of either label in other cases, in contrast, has frequently suggested an approach opposite that so denominated here. E. g., Perkins v. Standard Oil Co., 396 F.2d 809 (9th Cir. 1968) (court labeled approach “target area” but employed the “direct injury” analysis), rev’d, 395 U.S. 642, 89 S.Ct. 1871, 23 L.Ed.2d 599 (1969). Likewise, some courts have failed to perceive significant distinctions between the tests. E. g., Nationwide Auto Apprasier Serv., Inc. v. Ass’n of Cas. & Sur. Cos., 382 F.2d 925 (10th Cir. 1967). It is to be hoped that the resolution suggested in our present opinion will obviate the use of either label in the future.
. We do not mean to imply that each circuit falls neatly into one of the two jngeonholes. Only the Eighth Circuit and ours, for example, have consistently followed the “target area” approach, e. g., Mulvey v. Samuel Goldwyn Productions, 433
Question: What is the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court)?
A. Trial (either jury or bench trial)
B. Injunction or denial of injunction or stay of injunction
C. Summary judgment or denial of summary judgment
D. Guilty plea or denial of motion to withdraw plea
E. Dismissal (include dismissal of petition for habeas corpus)
F. Appeals of post judgment orders (e.g., attorneys' fees, costs, damages, JNOV - judgment nothwithstanding the verdict)
G. Appeal of post settlement orders
H. Not a final judgment: interlocutory appeal
I. Not a final judgment: mandamus
J. Other (e.g., pre-trial orders, rulings on motions, directed verdicts) or could not determine nature of final judgment
K. Does not fit any of the above categories, but opinion mentions a "trial judge"
L. Not applicable (e.g., decision below was by a federal administrative agency, tax court)
Answer:
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songer_geniss
|
C
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis. Consider the following categories: "criminal" (including appeals of conviction, petitions for post conviction relief, habeas corpus petitions, and other prisoner petitions which challenge the validity of the conviction or the sentence), "civil rights" (excluding First Amendment or due process; also excluding claims of denial of rights in criminal proceeding or claims by prisoners that challenge their conviction or their sentence (e.g., habeas corpus petitions are coded under the criminal category); does include civil suits instituted by both prisoners and callable non-prisoners alleging denial of rights by criminal justice officials), "First Amendment", "due process" (claims in civil cases by persons other than prisoners, does not include due process challenges to government economic regulation), "privacy", "labor relations", "economic activity and regulation", and "miscellaneous".
MEMPHIS COMMERCIAL APPEAL, Inc., v. JOHNSON.
No. 7460.
Circuit Court of Appeals, Sixth Circuit.
May 5, 1938.
G. T. Fitzhugh, of Memphis, Tenn. (Fitzhugh, Murrah & Fitzhugh, of Memphis, Tenn, on the brief), for appellant.
Phil M. Canale, of Memphis, Tenn. (Canale, Glankler, Loch & Little, of Memphis, Tenn., and P. M. Harbert, of Savannah, Tenn., on the brief), for appellee.
Before HICKS, SIMONS, and ALLEN, Circuit Judges.
HICKS, Circuit Judge.
Appellee, Mrs. J. C. Johnson, brought suit against appellant, Memphis Commercial Appeal, Inc., for libel and alleged in her declaration that on September 23, 1933, appellant, in the Memphis Commercial Appeal, a newspaper prtblished by it, willfully, recklessly, falsely, and maliciously, and with the intention to injure her, wrote and published of and concerning her .a certain false, libelous, and defamatory matter, to wit:
“Savannah, Sept. 22 — (Ins)—A mysterious attack upon Mrs. J. C. Johnson found trussed in a coal bin in the basement of her home, and semiconscious from chloroform fumes, and was the object of police investigation today.
“Mrs. Johnson was found late yesterday after a child heard her groans and sent police to the rescue. She had recently received threatening letters from another woman who demanded'that ‘you must give my husband freedom so that he can live with me/ she told police.
“After taking the letter to a lawyer yesterday, Mrs. Johnson said, she returned to her home, went to the bedroom and lay down for a nap. The next thing she knew, she said, was a choking sensation and the fumes of chloroform.”
The case was tried upon a plea of not guilty and issue joined thereon. Appellant insists that the proof failed to show any liability against it, and preserved its point by a motion for a directed verdict and by requested instructions which were refused.
The article was published as alleged and was true of Mrs. J. C. Johnson of Savannah, Ga., but was wholly untrue of appellee.
The court limited and simplified the 'issues by the following instruction:
“The court charges the jury that the plaintiff has presented no proof of any malice on the part of the defendant, therefore, even if you should find for the plaintiff, you cannot award any punitive damages. And the court charges you that no special damages have been proven.
“The court charges you that the plaintiff, in open court, has withdrawn and abandoned the allegation of her declaration that the defendant ‘intending to injure plaintiff, did willfully, recklessly, falsely and maliciously write and publish of and concerning the plaintiff the alleged libelous and defamatory article of which she complains.’ She has also, in open court, withdrawn and abandoned the claim alleged in her declaration that she is entitled to punitive damages; that is, to damages for an alleged injury intentionally and wrongfully inflicted upon her by the defendant. You, therefore, have no right, should you find for the plaintiff, to award her punitive damages against the defendant; but will understand that she has abandoned all claim and rights to punitive damages.”
The article came to appellant from the International News Service, a reliable news agency, and was printed exactly as received. It did not localize the story by printing the word “Georgia” or the abbreviation “Ga.” either in the date line or otherwise, but appellant knew that it came from Savannah, Ga. Savannah, Tenn., a town of approximately 1,000 people, is situated about 90 miles from Memphis, where the Commercial Appeal is published. The paper had a circulation of 69 in Savannah and something less than 100 in Hardin county, of which it is the county seat. The town was incorporated, though there was a short interval in 1933, when it was not. It was policed by county officers, and by a private officer employed by its merchants. Appellee was a teacher in its schools. She was 28 years old, had attended the University of Tennessee, and had removed to Savannah, Tenn., upon her marriage. She and her husband, who was superintendent of public instruction, lived in an apartment on the basement level of a hotel in Savannah. Back of their apartment and on the same level was the coal bin of the hotel. The apartment was known and referred to as their home.
There was evidence, which need not be recited in detail, that a substantial numher of people, among them professional men, county officials, merchants, and teachers, read the article and understood it to refer to appellee.. The following instruction to the jury was excepted to: “Gentlemen of the Jury, you may take into consideration whether or not the defendant exercised due care in inserting the initials ‘INS’ in the date line of the article involved in this suit after the word ‘Savannah’ and omitting from the date line the word ‘Georgia.’ If you find from .the evidence that the defendant failed in this respect to localize and apply the article complained of to a Mrs. J. C. Johnson of Savannah, Georgia; and that the article as printed would be understood by a substantial number of ordinary sensible readers of the Commercial Appeal, living in and around Savannah, who knew the plaintiff, to refer to the plaintiff Mrs. J. C. Johnson of Savannah, Tennessee, then your verdict should be for the plaintiff.”
We think this instruction was a fair statement of the law as applicable to the facts.
While the theory of intentional injury and actual malice had been abandoned by appellee, and was taken entirely out of the case by the instruction first above quoted, there yet remained the question whether appellee was injured by a negligent or careless publication of the article. In Peck v. Tribune Co., 214 U.S. 185, 188, 29 S.Ct. 554, 53 L.Ed. 960, 16 Ann.Cas. 1075, the court said (page 555): “A libel is harmful o.n its face. If a.man sees fit to publish manifestly hurtful statements concerning an individual, without other justification than exists for an advertisement or a piece of news, the usual principles of tort will make him liable if the statements are false, or are true only of someone else.”
Further (page 556): “It may be that the action for libel is of little use, but, while it is maintained, it should be governed by the general principles of tort.”
See also Cooley on Torts, 4th Ed., Vol. 1, § 150.
Wé cannot say, as a matter of law, that appellant was free from negligence. The article was libelous per se when applied to any person other than Mrs. J. C. Johnson- of Savannahj Ga. Appellant knew that it was a serious reflection upon the virtue and integrity of any innocent married woman to whom it. might be applied. Savannah, Tenn., was in the expected orbit of its circulation and influence, and it had actual knowledge that its paper circulated there, and that the surname “Johnson” was common and familiar. It had no right to assume that no one in Savannah, Tenn., would answer the description of the “Mrs. J. C. Johnson” referred to in the article. While the article was intended to refer to Mrs. J. C. Johnson of Savannah, Ga., it does not follow that, as printed, it would not reflect upon the character _ and reputation of others. It was sensational and salacious, and appellant should have been particularly careful to see that it was accurate, for appellee was entitled to be protected in her character and reputation. Nothing more was required to prevent injury than the insertion of the abbreviation “Ga.” in the date line.
If, upon a finding of negligence,:the readers of the paper as above indicated were justified in believing that the article referred to appellee, her case was made out. See Washington Post Co. v. Kennedy, 55 App.D.C. 162, 3 F.2d 207, 41 A.L.R. 483. This leaves the question whether there was substantial evidence reasonably to justify their understanding that the article referred to appellee. The points of coincidence were several: (1) The names are identical, even to initials; (2) the places, Savannah; (3) the home or 'place of abode, situated near a coal bin. The use of'the term “police” has a more doubtful application to Savannah, Tenn., but we have no doubt that the question under all the circumstances was properly one for the jury. Commercial Pub. Co. v. Smith, 6 Cir., 149 F. 704.
Appellant insists that it was entitled to a directed verdict because of a variance between the declaration and the proof. The point made is that the gravamen of thé declaration was that appellant published the article with the specific intention of injuring appellee, while the proof indicated nothing more than negligence or carelessness. But as indicated by that portion of the charge first above quoted, some time during the trial appellee abandoned the allegation of any specific intention to injure her and without objection by appellant, so far as the record shows, the case proceeded to the close of the evidence upon the theory of negligence. The record fails to disclose anything in the procedure which tended to mislead appellant or which constituted harmful or reversible error. See Erie R. Co. v. Kennedy, 6 Cir., Í91 F. 332.
The judgment is affirmed.
Question: What is the general issue in the case?
A. criminal
B. civil rights
C. First Amendment
D. due process
E. privacy
F. labor relations
G. economic activity and regulation
H. miscellaneous
Answer:
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songer_interven
|
C
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
Your task is to determine whether one or more individuals or groups sought to formally intervene in the appeals court consideration of the case.
CITY OF CHICAGO, a Municipal Corporation of the State of Illinois, and Public Service Commission of the State of Wisconsin, Petitioners, v. FEDERAL POWER COMMISSION, Respondent, Natural Gas Pipeline Company of America, Intervenor. NATURAL GAS PIPELINE COMPANY OF AMERICA, Petitioner, v. FEDERAL POWER COMMISSION, Respondent.
Nos. 19604, 19836.
United States Court of Appeals District of Columbia Circuit.
Argued Oct. 28, 1966.
Decided Sept. 8, 1967.
As Amended Oct. 31, 1967.
Petition for Rehearing Denied Oct. 31, 1967.
See also 124 U.S.App.D.C. 13, 360 F.2d 828.
Mr. Mathias M. Mattern, Chicago, 111., of the bar of the Supreme Court of Illinois, pro hac vice, by special leave of court, with whom Mr. William T. Torkelson, Madison, Wis., was on the brief, for petitioners in No. 19,604.
Mr. William W. Brackett, Chicago, 111., for petitioner in No. 19,836.
Mr. Peter H. Schiff, Deputy Sol., F. P. C., with whom Messrs. Richard A. Solomon, Gen. Counsel, Howard E. Wahrenbroek, Sol. at the time of argument, and Abraham R. Spalter, Asst. Gen. Counsel, F. P. C., were on the brief, for respondent.
Before Burgee, Tamm and Leventhal, Circuit Judges.
LEVENTHAL, Circuit Judge:
This case presents a cluster of issues concerning the proper treatment, for purposes of regulation by the Federal Power Commission of the rates of natural gas pipeline companies, of the higher deductions permitted in calculation of Federal income tax by the liberalized depreciation provisions of Section 167 of the Internal Revenue Code of 1954. In addition to questions of general approach there are particular issues as to the effect of a rate settlement agreement.
I Procedural History.
The controversy before us began when rate increases were filed in 1960 by Natural Gas Pipeline Company (Natural), the petitioner in No. 19836. On Natural’s motion in the ensuing proceeding under Section 4(e) of the Natural Gas Act, the increased rates were put into effect on March 1, 1961, after the statutory suspension period expired, subject to Natural’s obligation to make such refunds as the Commission might validly order. After a full hearing was had, but before briefs were submitted to the examiner, Natural, its customers, the City of Chicago (Chicago) and the Wisconsin Public Service Commission (Wisconsin), and the Commission staff, agreed upon a rate settlement. The customers agreed to accept an increase in rates yielding approximately $6,200,000 per annum, about half the increase Natural had proposed, and Natural agreed to refund amounts already collected above the agreed-upon increase.
The settlement left open two questions for future determination, one of which relates to liberalized depreciation, and Natural agreed to abide by a Commission refund order “if any” with regard to the reserved issue, subject to its right to judicial review. On October 25, 1962, the Commission approved this settlement.
On February 3, 1964, the Commission issued Opinion 417, Alabama-Tennessee Natural Gas Co., wherein it announced principles concerning rate treatment of liberalized depreciation, and the City of Chicago then moved the Commission to decide the liberalized depreciation issue with respect to Natural. On March 18, 1965, the Commission issued its Opinion 456, concluding that the principles of Alabama-Tennessee were applicable to Natural and making certain other rulings with respect to effective date and settlement agreements that will be discussed in due course.
Petitions for rehearing were filed and denied, and petitions for review under Section 19(b) of the Natural Gas Act were filed both by Chicago and Wisconsin as joint petitioners in No. 19604, and by Natural in No. 19836.
Consideration by this court was deferred pending judicial review of the Commission’s Alabama-Tennessee decision. That decision was affirmed by the Fifth Circuit in Alabama-Tennessee Natural Gas Co. v. FPC, 359 F.2d 318 (1966). The Supreme Court denied certiorari, 385 U.S. 847, 87 S.Ct. 69, 17 L.Ed.2d 78 (1966).
II The Validity of the Commission’s Requirement for “Flow Through” to Consumers of the Tax Reductions Achieved by Natural Through Use of Liberalized Depreciation.
1. The Federal Power Commission, with judicial approval, has been engaged under the Natural Gas Act in regulating the maximum rates of natural gas pipeline companies by permitting rates that will yield operating revenues sufficient to cover “cost of service,” a term that in essence includes, in addition to operating costs, depreciation, etc., the “return” to the company which the Commission calculates by providing a fair rate of return on a rate base equal to the amount prudently invested in utility property, and the “expense” of Federal income tax payable on the allowed return. The objective is to allow a fair profit, after taxes, ascertained after taking into account “a variety of factors, such as the risks of the business, the necessity for attracting capital, and the desirability of lower cost of gas to the public.”
2. Focusing on the income tax element this is regarded by regulatory commissions as part of the “cost” of service, a terminology in line with the general thinking of businessmen, although for various purposes economists and accountants draw a distinction between tax burden and cost. The difference is largely one of nomenclature since in any event it is necessary to provide, obtain or permit revenues after taxes that are sufficient to cover all costs other than taxes.
The general rule followed by the Commission, and indeed most if not all regulatory commissions, is that the “consumers should be charged for only the actual liability for Federal income taxes.” However, as the Commission pointed out, in some cases normalization of tax deferrals is required lest future consumers be compelled to subsidize present consumers being served by the operations accruing tax liabilities. The specific question of the proper regulatory treatment of the liberalized depreciation tax deduction is one on which the regulatory commissions are nearly equally divided.
A bare majority use the so-called “normalization” method by which the tax expense component of cost of service is calculated by using the higher income tax that would have been payable if depreciation were calculated on the “straight-line” method almost universally utilized for tax purposes prior to the 1954 Code, without reduction for the amount of “deferred” taxes carried in a tax reserve on the books in contemplation of the future tax obligation. This approach focuses on the current tax reduction achieved by the utility as a tax “deferral,” with liberalized deduction providing higher depreciation deductions and hence lower taxes in the early part of the property’s usable life, and of lower deductions and higher taxes in later years.
The rejection of the normalization approach by respondent Commission, and others, rests on the view that the deferral conception is inappropriate in the absence of a reasonably foreseeable decline in depreciable plant account, and hence is inapplicable where a growing or stable plant is ascertainable for the foreseeable future. In Alabama-Tennessee the Commission determined that the deferral conception was inapplicable in view of the factual condition of growing or stable plant for the foreseeable future, a condition found to exist in general for the natural gas industry and natural gas pipeline companies. The finding of this condition followed a review of forecasts for energy supply and demand and other pertinent economic data, a forecast of continuous growth characteristics for the industry for some time, albeit at a more modest rate than the dramatically steep incline that has marked the industry in the post-war decades, and a relative assurance of at least stable plant for ’the foreseeable future.
In Alabama-Tennessee the Commission rejected normalization for the natural gas industry in general, but left open the possibility that a different ruling might be applicable to a particular company that showed its condition was different from the industry’s in this regard. No such showing was attempted by Natural, and there is no serious effort in this case to dispute the factual finding underlying the flow-through determination, similar to that made for the company in Ala bama-Tennessee, that “Natural will maintain a growing or stable plant for the foreseeable future.”
3. We follow the decision of the Fifth Circuit in Alabama-Tennessee which sustained the Commission’s findings as reasonable and supported by evidence and upheld the general validity and particular application of the policy determination requiring “flow-through” of the tax reduction ascribable to liberalized depreciation. Although in general the denial of certiorari is said to import no conclusion on the merits, it is not insignificant that in Alabama-Tennessee the writ was denied notwithstanding the concession of the Solicitor General that an important recurring question was involved.
In any event, Alabama-Tennessee is plainly in line with the principles expressed in FPC v. United Gas Pipe Line Co., 386 U.S. 237, 87 S.Ct. 1003, 18 L.Ed. 2d 18 (1967). In that case the Court held that where affiliated companies obtain a tax saving through consolidated returns, a regulatory commission can flow through the amount it calculates, by a reasonable allocation, to be the tax saving of a regulated company within the affiliated group. The Court pointed out that the tax law does not attempt to set rates, and stated (at 244-245, 87 S.Ct. at 1007):
[W]hen the out-of-pocket tax cost of the regulated affiliate is reduced, there is an immediate confrontation with the ratemaking principle that limits cost of service to expenses actually incurred. Nothing in Colorado Interstate [Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 65 S.Ct. 829, 89 L.Ed. 1206] or Panhandle [Panhandle Eastern Pipe Line Co. v. FPC, 324 U.S. 635, 65 S.Ct. 821, 89 L.Ed. 1241] forbids the Commission to recognize the actual tax saving impact of a private election to file consolidated returns. On the contrary, both cases support the power and the duty of the Commission to limit cost of service to real expenses. [Footnote omitted.]
While Natural’s contentions to this court are for the most part disposed of by the court’s decision in Alabama-Tennessee, some supplementary comments may be appropriate. First, we note that it is in the tradition of sound regulation for a commission to develop doctrines, as respondent Commission has done, that are attuned to its growth forecast. Indeed, it is this factual experience of renewal of capital investment that has undercut the objections of theory, once expressed by natural gas companies, that the Commission’s use of prudent rate base and deduction of depreciation reserves would lead in time to the absurdity of a “vanishing rate base” and zero return. Similarly here the factual projection of capital investment undercuts the objection grounded on the theoretical point that the flow-through approach exposes a company to the risk of a future tax bill without the comfort of a tax reserve.
Given the premise of a growing or stable plant, there is no basis for our rejecting as arbitrary the Commission’s conclusion that the utility will obtain a continuing tax reduction from liberalized depreciation. That proposition, noted in publications, and presented in this record, as in the Alabama-Tennessee record, through the testimony of Mr. Melwood Van Scoyoc, as a witness for intervenors, is essentially demonstrable as a matter of mathematics. The critical point is that whereas tax “deferral” is the correct analysis when only a single unit of property is involved, when the procedure is applied to “property comprised of a large number of units as is characteristic of utility plant,” typically with different vintages, depreciated through use of “average service life” experience, composite depreciation on total plant will exceed straight line composite depreciation as long as total dollar amount of gross composite plant (before depreciation) remains at least stable, since the depreciation on older assets that is below normal “is counterbalanced by ‘above normal’ depreciation on new assets.”
Natural’s primary emphasis is on the legislative intention it gleans from the tax statute. What Congress provides in a tax statute does not necessarily control in the implementation of federal regulatory statutes. See FPC v. United Gas Pipe Line Co., supra,. In Alabama-Tennessee, after reviewing the legislative history at length after contrasting the Congressional silence on the liberalized depreciation issue with the precise language used in the provision of the tax statute that expressly restricted the rate-making authority of federal regulatory agencies to reduce the federal income tax component of cost of service by the amount of the investment tax credit, and after projecting as well as it could how the legislature would have dealt with the concrete situation if it had but spoken, the Fifth Circuit concluded (359 F.2d at 335):
Given the long reach of the Natural Gas Act, as liberally interpreted by the Supreme Court, and weighing the consumer-oriented objectives of that Act against the Section 167 objective of promoting plant expansion by postponing the timing of tax payments, we conclude: It is unlikely to suppose that Congress amended the Natural Gas Act by a reference in the Internal Revenue Code; it is unreasonable to read Section 167 as a mandate reducing the Commission’s responsibility to fix fair rates according to its usual ratemaking policies in favor of the consumer. * * * [We] infer that its [Congress’] decision not to disturb, in terms, the status quo of ratemaking indicates a congressional intent that each federal regulatory agency should continue to exercise an informed discretionary authority in accordance with the agency’s usual standards in the light of the needs peculiar to the particular industry subject to rate regulation.
The fact that the tax statute is not controlling does not necessarily end the matter. A regulatory agency may, should, and in some instances must, give consideration to objectives expressed by Congress in other legislation, assuming they can be related to the objectives of the statute administered by the agency. Here, however, the Commission did give consideration to the Congressional objective of stimulating investment. It pointed out that the major expenditures by natural gas pipelines result from system expansion to serve additional loads, and technological obsolescence has not been a large investment factor; that lower rates tend to generate higher volume and thus ultimately to require expansion; that natural gas pipelines have no need for the additional capital provided by tax reserves to finance expansion in view of the regulatory principles under which rate of return is established so as to attract new capital and there is provision for adequate working capital allowance in the rate base; and that there is no indication that pipelines will have any problem financing the moderate expansion expected in the near future, especially in view of the tremendous expansion financed in the past two decades at a cost of over $9 billion. The Commission applied to Natural its rationale in Alabama-Tennessee “that flow-through and lower rates are a more effective stimulus to new investment than normalization”; and Natural does not contend that if it be assumed that the approach is sound for the natural gas pipeline industry generally it is not properly applicable to Natural.
Natural’s position is that the Commission is required not only to further the Congressional objective of enhancing investment, but to adopt the method prescribed by Congress for achieving that objective, and that Congress sought economic stimulus through the technique of providing current investment funds and not through the technique of tax reduction. We do not read the legislative history as indicating that Congress would have felt frustrated if producers in a competitive industry decided to treat the liberalized depreciation as in effect a tax reduction and to lower prices in contemplation of increasing sales and capital investment. The regulation of companies protected from free competition may properly be conducted so as to seek the kind of service and price reductions that would have been achieved under free competition — assuming the utility is not deprived of a fair return. In any event, we agree with the conclusion of the Fifth Circuit that the courts are not in a position to choose between economic theories or to mandate the particular technique espoused by Natural as the plainly ascertainable will of Congress.
4. Natural says that the Commission has been treating the courts as “rubber stamps,” stating in its brief: “It has repeatedly changed its position and each time it has ignored prior judicial holdings, apparently confident that it will be upheld in its new-found reversible exercise of ‘expertise.’ If the Commission can successfully do this — if its decisions can be relied upon only until the composition of the Commission changes and a different social philosophy gains control— and can secure judicial approval each time it switches position, then Natural submits that judicial review has lost its meaning.”
In reply, respondent’s brief retraces the Commission’s steps and argues that they were responsive to growing appreciation of the consequences of the normalization approach and to new judicial indications of the range of discretion available to the Commission. Natural disputes the reading of pertinent decisions both by the Commission and in the Alabama-Tennessee decision of the Fifth Circuit. So far as our own decisions go, it may be observed that in 1955 City of Detroit, Mich. v. Federal Power Commission, upheld, as the result intended by Congress, the Commission’s normalization approach to the accelerated amortization applicable under the 1950. Code to particular national defense facilities. The Commission’s 1956 Amere decision assumed that City of Detroit governed liberalized depreciation, notwithstanding the fact that the accelerated amortization provisions were concerned with particular units of plan, and did not involve the entirety of new plant covered by liberalized depreciation, which assures and generalizes the savings effect related above.
Our 1963 en banc decision in Panhandle Eastern Pipe Line Co. v. Federal Power Commission, limited the scope of this part of City of Detroit when the court approved the 1961 determination of the Commission, faced with the mounting accumulations of tax deferrals under the normalization policy, that limited the rate of return on this part of rate base to only 1.5%. The indications of agency discretion in the majority opinion were relied upon by the Commission as a recognition of its authority when it acted within a year to reject completely the “normalization” approach.
The Rule of Law does not forbid an agency from modifying its regulatory policy, and the courts have upheld policy revision many times. Indeed one of the signal attributes of the administrative process is flexibility in reconsidering and reforming of policy. What is required by the Rule of Law is that agency policies and standards, whether or not modifications of previous policies, be reasonable and non-discriminatory, and flow rationally from findings that are reasonable inferences from substantial evidence.
There is perhaps one additional requirement inserted in case of a change in policy, that the agency give due consideration to the equities, if any, arising out of commitments based on previous rulings.
The possibility that changes in policy and viewpoint may come with changes in membership is inherent in an agency’s characteristic as an institution headed and staffed by human beings, and will not come as a surprise to any observer of the administrative process. Sometimes indeed an industry resists renomination of a commissioner precisely to obtain a change in policy. It is not necessarily invidious that a change in approach may reflect a change in personnel; indeed, it may well be a blessing rather than a vice that the rigidity of staff bureaucracy may be minimized by changes of agency membership that can initiate a fresh look at old problems, rather than a mechanical perpetuation of what has been done in the past. In any event, judicial review is not abdicated by a doctrine that accepts an agency discretion to change policies, but rejects rulings based on improper pressures on or even secret contacts with administrators, the exercise of pure whim, or other irrational or arbitrary bases of decision.
Insofar as Natural relies on the inaction of Congress during the years of the Commission’s normalization ruling, this does not significantly add to or subtract from the legislation as passed in 1954. Sometimes legislative inaction may be taken as acquiescence in the validity of executive or administrative action under an assumed power. More rarely can it be taken as a prohibition where there has been executive inaction or delay in apprehending the scope and nature of the evil that is later considered to require attention in the public interest.
We affirm the Commission’s policy use of the “flow through” of the current tax reduction resulting from use of liberalized depreciation and its application of that policy in limitation of Natural’s rate increase.
lli Invalidity Under Settlement Agreement of the Commission’s Deduction from Natural’s Rate Base of Previously Accumulated Deferred Taxes.
The Commission, after concluding that Natural’s condition was properly governed by the principles of Alabama-Tennessee, decided that as was done in that case “we shall provide for deduction of the accumulated reserves from the rate base.” We think this action was precluded by its 1962 order approving the parties’ Stipulation and Agreement to Terminate Proceedings, hereafter referred to as their Settlement Agreement.
In Alabama-Tennessee, after adopting the flow-through policy, the Commission turned to the existing accumulation of deferred tax reserves, and held they should be maintained as contingency reserves against the remote possibility that due to some improbable but conceivable combination of circumstances future ratepayers may be called upon to defray the cost of higher taxes attributable to the earlier use of liberalized depreciation. It concluded that since the accumulations will not be needed in the foreseeable future to defray any increase in taxes payable on earnings from properties used in rendering service, the balances “must now be regarded as consumer-contributed capital collected for a specific purpose of remote and improbable occurrence.”
The Commission formulated the policy, prospective in effect from the date of the order, that the rate of return on these balances should be zero, since no cost had been incurred in their accumulation, and it accordingly modified its policy of permitting gas pipeline companies to earn a 1.5% return on those balances.
As to the general propriety of such an approach, assuming a flow-through policy, we agree with the Fifth Circuit’s affirmance of this ruling in Alabama-Tennessee. We agree with Natural, however, that the Commission’s application of this ruling to Natural was in excess of the question reserved for the Commission by the Settlement Agreement, which uses explicit and unambiguous language reserving only the question whether Natural should use “flow through” or “normalization” in computing its federal income tax expense allowance. Opinion No. 367 approving the Settlement Agreement uses the same terminology, and makes no reference to other aspects of liberalized depreciation problem, such as effect on rate base or rate of return. Any adjustment in rate base or rate of return would affect the “return” component of the cost of service which is separate and distinct from the Federal Income Tax expense allowance. The difference between these two items is not recondite technicality; it is part of the basic vocabulary of all parties and counsel to a rate proceeding.
In denying Natural’s petition for rehearing the respondent Commission said that the determination of the issue whether Natural was properly subject to flow through “also involved, in our opinion, the proper treatment of the accumulated deferred taxes,” since these reserves reflect the benefits of depreciation that had not been flowed through. We have no doubt that the two subjects are interrelated, as the discussion in Alabama-Tennessee makes clear, but we also have no doubt that they are two separate subjects, and that under the Settlement Agreement one was settled by the parties and one was reserved for Commission decision.
The case is governed by the need for construing settlement agreements in accordance with the specialized understanding of parties to a rate proceeding. There is little we can add to the Fifth Circuit’s knowledgeable discussion of settlement agreements and their interpretation in Texas Eastern Transmission Corp. v. FPC, 306 F.2d 345 at 348 (5th Cir. 1962):
* * * [0]ne sure way to discourage voluntary settlements is for the Commission, at the behest of one party or the other, or the ubiquitous intervenors, to read into contracts things which are simply not expressed or not there, out of the thoroughly commendable (and understandable) feeling that unless that is done the result is not as good as it ought to have been. This is particularly true in this area where, as was the case here, the proposed settlement is subjected, as it should be, to the closest scrutiny by the Commission and its staff. It is more than arms’ length. Overreaching is an impossibility. But precision is not merely a possibility. Precision is almost a certainty as skilled partisans undertake to hammer out the bargain under the ever-present watchful eye (and hand) of the independent agency as the guardian of the public interest. Consequently, both in its substantive provisions and in the terminology sought to memorialize the undertaking, the parties ought to be able to accept the contract as drafted, executed and approved. It should stand for what it says.
In construing the contract in accordance with its terms, and incidentally in a way that Chicago as well as Natural tells us is sound, we observe that this is not necessarily the perpetuation of an unintended and egregious mistake. We note that Mr. W. H. Beidatsch, the Commission staff witness, calculated that fair rate of return, was 6.28%, if the “capital obtained through the deferral of income taxes” is assumed to be “cost free,” and 6.32% if a cost of 1.5% “is imputed to such capital.” So the parties and staff were not unaware of the problem. And the City of Chicago in particular was presumably not unaware that only two years previously the Supreme Court of Illinois held that the state commission could in its discretion recognize deferred tax liability as a present expense, but could not fail to exclude from rate base the funds generated by accruing deferred tax expense.
The Settlement Agreement says the agreement by the parties as to amount of cost of service, reached for purposes of settlement, “is not intended to reflect agreement to the amount, percentage or method or derivation of any particular item of such cost of service.” It also expressly provides that it is without prejudice to the right of the parties hereafter to question in any other proceeding the propriety of any method or principle employed or the accuracy of any data used in connection with this settlement.” These are important provisions. The parties may be disposed to avoid the expense and distractions of litigation if the various rates reached in a settlement do not constitute a binding admission or ruling on principle. But for purposes of considering whether it makes sense to construe the Settlement Agreement as written, it may be supposed that at least the intervenors and staff may have been satisfied that in their calculation the settlement was acceptable in that it essentially reflected a 1.5% rate of return for that part of capital composed of deferred tax accruals. Although this was no more than would have been required by the Commission’s policy at the time, that policy was of only one year’s standing, there was at least some question of its validity under the City of Detroit case, and it had not yet been affirmed by the 5-4 en banc decision which was issued by this court in 1963. An agreement by Natural not to seek a greater return and by the customers and staff not to press for a zero return has every element of a meaningful bargain. That agreement was not articulated in express terms, but it is, we think, the meaning and consequence of the Settlement Agreement executed by the parties and duly approved by .the Commission.
IV Validity of the Commission’s Decision To Apply the Flow Through Policy to Natural’s Rates as of the Date of Its Alabama-Tennessee Decision.
The Commission concluded that the flow-through policy should be applied to Natural’s rates as of February 3, 1964, the date from which the Commission decided in Alabama-Tennessee that tax benefits from liberalized depreciation should be flowed through. We hold the Commission’s action valid, and shall state our reasons while discussing and rejecting the attacks from both sides.
A. Contentions of Invalidity under the Natural Gas Act
Chicago contends that Section 4 (e) of the Natural Gas Act required the Commission to make its order retroactive to the effective date of the increased rates held invalid. Section 4(e) does give the Commission “power * * * to make its order retroactive, by means of the refund procedure, to the date the change became effective.” United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332, 341, 76 S.Ct. 373, 379, 100 L.Ed. 373 (1956). That does not mean Section 4(e) requires this retroactive result. Explaining why its ruling was not made retroactive to the effective date of Natural’s rate increase, the Commission stated “that in Alabama-Tennessee we were announcing a new policy and overruling previous decisions. It was therefore not equitable, contrary to the contentions of Chicago, to make our determination effective before February 3, 1964, but on that date the industry was informed of the new policy, and it was appropriate that refunds should be ordered from then.”
Natural on the other hand contends that the Commission erred in applying its policies to Natural retroactively, that is prior to the date on which it found such policies valid as to Natural (March 18, 1965).
We reject both sets of contentions. The Commission acted sensibly and reasonably in making its new policy effective as of-fhe date it was announced to the industry. We have recently upheld as reasonable, against a charge that retroactive application was unlawful, the Commission’s determination under the Federal Power Act to make a license requirement effective as of the date it issued decisions setting forth new criteria for requirement of licenses. Niagara Mohawk Power Corp. v. FPC, 126 U.S. App.D.C. 376, 379 F.2d 153 (May 18, 1967).
Instructive analogy is afforded by precedents of both legislative and judicial branches. Customarily decisions of the judicial branch are retroactive and the legal principles announced by the court are considered to be the rules that governed transactions and events prior to the date of decision. But this is not a necessary feature even of the judicial process. In recent years the Supreme Court has deemed it appropriate to make several doctrines effective prospectively as of the date of its announcement of a change in the course of decision. The Court has rejected the Blackstonian concept that decisions are only the exposition of pre-existing principles that are “discovered” by the “living oracle of the law,” and that overruled decisions reflect only a human error in the Court failure of true discovery. Instead it took the view that even courts do more than discover the law, that overruled decisions are judicial facts and that practical consequences, such as hardship or injustice, can be taken into account in deciding whether changes in decision should be retroactive.
A similar destination is often reached from another direction by the legislative branch which customarily operates prospectively but frequently finds that the public interest lies in making legislation retroactive to the date of public awareness of consideration being given to proposed changes.
The good sense and reasonableness, and hence presumptive validity, of a determination to start the effectiveness of a new policy with the date of a public awareness, are not to be gainsaid for an administrative agency because it states, as respondent Commission did, that this solution is “the most equitable resolution” it could reach. It is argued to us that Section 4(e) “does not confer equity powers” upon respondent Commission. It may readily be agreed that a commission does not have the same range as an equity court to summon powers to the call of justice. It likewise does not have the power to punish for contempt. However, when an agency is exercising powers entrusted to it by Congress, it may have recourse to equitable conceptions in striving for the reasonableness that broadly identifies the ambit of sound discretion. Conceptions of equity are not a special province of the courts but may properly be invoked by administrative agencies seeking to achieve “the necessities of control in an increasingly complex society without sacrifice of fundamental principles of fairness and justice.”
Upholding the Commission’s action is not equivalent, as Chicago suggests, to a ruling that the agency would be free to permit the utility to retain some rates the Commission had found unjust. The point is, rather, as respondent’s brief puts it, that the “Commission’s decision in effect means that until February 3, 1964, the date of the Alabama-Tennessee decision, rates reflecting normalization were just and reasonable,” while rates reflecting normalization subsequent to the notice then given to the industry were “to that extent, excessive and unjustified.”
Natural would have no cause for complaint over the 1964 date if in 1964 the Commission had proceeded by way of a policy regulation. On this record it shows no substantial ground for a difference in result because the agency declared a general principle in the context of an individual proceeding, but with leave to the industry to participate amicus curiae; it was free to utilize this technique notwithstanding the efforts of courts and scholars to encourage greater use of regulations for broad policy declaration. Satisfied that its findings were valid with respect to Alabama-Tennessee “and other typical pipelines” the Commission left a gas pipeline not a party to that proceeding “legally free to introduce evidence and testimony of exceptional situations demonstrating the inapplicability of the determinations made in Opinion No. 417 to its individual situation.” That left a pipeline free to try to be excused, but did not require a postponement of the effective date for a company like Natural that did not even make an effort to claim its individual situation was “exceptional.” New England Divisions Case, 261 U.S. 184, 199, 43 S.Ct. 270, 67 L.Ed. 605 (1923). A contrary requirement would breed litigation for the sole purpose of delay.
This leads us into a discussion of Natural’s thorny contention that it is entitled to an October 1965 effective date because dates in this general range are reflected in the orders, with prospective effect, entered with regard to other companies. Certainly Natural is entitled to relief if it has been singled out for a difference in treatment not justified by a difference in conditions. And Natural points out that Opinion 417, the Alabama-Tennessee opinion, after phrasing the issues, stated that the issue had been reserved in other cases, wherein “we uniformly provided that any changed policy * * * would have only a prospective effect on the rates and charges of the individual pipelines concerned.” In a footnote Natural’s case was listed along with three other cases where the ultimate result was prospective from a 1965 effective date.
We find somewhat disingenuous the Commission’s observation that the reference to the present proceeding in Opinion 417 conveys no more than that the same issue was presented in both eases. But we do agree that the description of the present proceeding, in the course of an introductory background, was not a commitment to make the present order effective as of the date of its issuance. The settlement obviously contemplated some refund if the liberalized depreciation issue was decided on the merits contrary to Natural’s position. We think the Commission decided in accordance with the spirit of both the settlement and the forecast that a change in policy would be “prospective” by its decision under review making the change prospective from an effective date of February 3, 1964.
When we turn to the question of discrimination in factual results, we find that the proceedings listed by Natural involved sufficient differences in posture to negative the charge of arbitrary discrimination. All of the cases involved either a section 5 (a) proceeding, in which the Commission has no statutory authority to order refunds and can act only prospectively, or they involved section 4(e) proceedings in which rate reductions were put forward that included but were not limited to the reductions implementing flow throughs.
The proposals were settlements consented to by consumers, cities, and state commissions. Agreed reductions and settlements may involve compromises that recognize that immediate reductions may be preferable to larger refunds sometime in the future. Refunds are not an adequate substitute for an immediate rate reduction. FPC v. Tennessee Gas Transmission Co., 271 U.S. 145, 154-155, 83 S.Ct. 211, 9 L.Ed.2d 199 (1962). As to the Commission’s order approving the joint rate reduction offer of American-Louisiana and Michigan-Wisconsin, affiliated companies which were cited along with Natural in the footnote in Opinion 417, the Commission's opinion under review noted that in those cases, unlike Natural, no evidence had been introduced on treatment of liberalized depreciation and a further evidentiary hearing would have been required, which was not the case as to Natural where no compromise was required in order to avoid delay in implementation, and also that reductions were proposed as to the rates payable by the consumers (to Michigan-Wisconsin).
Though the various Commission’s actions have been, so to speak, reconciled so as to avoid the taint of illegal discrimination, we acknowledge an uneasiness that may well have its roots in the fact that the Commission’s general policies were implemented in individual proceedings. The Commission followed up Opinion 417 with an accounting regulation, and charges of discrimination could have been obviated at the start by use of policy regulations both for restatement of the principles of the policy decisions and crystallization of implementing sub-principles. The continued expressions of courts and commentators stressing the desirability of generalized approaches to generalized problems (supra note 40), does not betoken a desire to meddle with administrative details and techniques, but rather an uneasiness lest an excessively individuated approach may be a seed bed that is too favorable to the rank weed of discrimination
Question: Did one or more individuals or groups seek to formally intervene in the appeals court consideration of the case?
A. no intervenor in case
B. intervenor = appellant
C. intervenor = respondent
D. yes, both appellant & respondent
E. not applicable
Answer:
|
songer_respond1_8_2
|
B
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "miscellaneous". Your task is to determine which of the following categories best describes the litigant.
CLAUSON v. DRUMMOND et al.
No. 4252.
United States Court of Appeals First Circuit.
Feb. 24, 1950.
For original opinion, see 172 F.2d 221.
Theron Lamar Caudle, Assistant Attorney General, Ellis N. Slack, Robert N. Anderson and Leland T. Atherton, Special Assistants to the Attorney General, and Alton A, Lessard, United States Attorney, and Edward J. Harrigan, Assistant United States Attorney, both of Portland, Me., on the brief for appellant.
William B. Mahoney and Drummond & Drummond, of Portland, Me., on the brief for appellees.
Before MAGRUDER, Chief Judge, and MAHONEY and WOODBURY, Circuit Judges.
PER CURIAM.
Upon consideration of motion by appellees, filed January 24, 1950, asking this court to recall its mandate of February 12, 1949, and to direct the District Court “to reconsider this cause in the light of Section 7 of the Technical Changes Act of 1949, Public Law 378, 81st Congress, Chapter 720, 26 U.S.C.A. § 811(c), U.S. Cong. Ser. P. 2729, and the decisions of the Supreme Court of the United States in Commissioner v. Church’s Estate, 335 U.S. 632, 69 S.Ct. 322; Estate of Spiegel v. Commissioner, 335 U.S. 701, 69 S.Ct. 301",
And it appearing that the granting of such motion would be superfluous and unnecessary, since the judgment of this court did not direct the entry of judgment for appellant but merely reversed the judgment of the District Court on the law as it then stood, and the mandate of this court “commanded that such further proceedings be had in said cause, in conformity with the aforesaid judgment of this court, as according to right and justice, and the laws of the United States, ought to be had, the said appeal notwithstanding”, thereby leaving the District Court free to consider the applicability of a supervening Act of Congress before entering a final judgment upon remand,
Now, therefore, without determining whether this court has power to recall its mandate issued at a prior term of court, it is ordered that the motion for recall of mandate be, and the same is hereby, denied.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "miscellaneous". Which of the following categories best describes the litigant?
A. fiduciary, executor, or trustee
B. other
C. nature of the litigant not ascertained
Answer:
|
songer_genapel1
|
G
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed appellant.
Tony FERNANDEZ, Appellant, v. Raymond W. MEIER, Appellee. Anthony FERNANDEZ, Appellant, v. UNITED STATES of America, Appellee.
Nos. 23512, 23819.
United States Court of Appeals, Ninth Circuit.
Oct. 5, 1970.
Tony Fernandez (argued) pro. per.
■ Anthony Fernandez (argued), pro. per.
J. S. Obenour (argued), Asst. U. S. Atty., Stan Pitkin, U. S. Atty., Tacoma, Wash., for appellee.
Before HAMLEY and KOELSCH, Circuit Judges, SMITH, District Judge.
Honorable Russell E. Smith, Chief Judge, United States District Court, Missoula, Montana, sitting by designation.
PER CURIAM:
This is a proceeding under 28 U.S.C. § 2255 attacking the sentence imposed on petitioner following conviction upon an indictment charging seven counts of interstate transportation of funds (18 U.S. C. § 2314) and one count of conspiracy to defraud the United States Government (18 U.S.C. § 371). The Court of Appeals affirmed the conviction on all of the substantive fraud counts but reversed the conviction on the conspiracy count. Fernandez v. United States, 329 F.2d 899 (9th Cir. 1964), cert. den., 379 U.S. 832, 85 S.Ct. 62, 13 L.Ed.2d 40.
Following his conviction, petitioner was sentenced to terms totaling eleven years and eleven months on the eight counts. At the time of sentencing, petitioner requested but was denied the right to inspect the presentence report made available to the District Court by the probation service. Petitioner bases his claim for relief upon the refusal of the District Court judge, at the time of sentencing, to grant petitioner the opportunity to examine the presentenee report. He asserts that the failure to afford him the opportunity to examine the presentence report, and thus the opportunity to refute any untrue or prejudicial material contained in it, amounted to deprivation of due process of law.
The rule in the federal courts is that the right to examine a presentence report is not one of constitutional magnitude and that the trial judge, in his discretion, may deny an accused an opportunity to inspect the report. Fed.R.Crim.P. 32(c) (2); Gregg v. United States, 394 U.S. 489, 492, 89 S.Ct. 1134, 1136, 22 L.Ed.2d 442, 446 (1969), reh. den., 395 U.S. 917, 89 S.Ct. 1738, 23 L.Ed.2d 232; Baker v. United States, 388 F.2d 931, 932-933 (4th Cir. 1968). Further, due process does not require that an accused be granted the right to confront witnesses who have made statements contained in a presentence report. Williams v. New York, 337 U.S. 241, 69 S.Ct. 1079, 93 L.Ed. 1337 (1949), reh. den., 337 U.S. 961, 69 S.Ct. 1529, 93 L.Ed. 1760 and 338 U.S. 841, 70 S.Ct. 34, 94 L.Ed. 514; United States v. Fischer, 381 F.2d 509, 511 (2d Cir. 1967); cert. den., 390 U.S. 973, 88 S.Ct. 1064, 19 L.Ed.2d 1185.
We have examined the presentence report and find no abuse of discretion on the part of the trial judge in refusing to permit inspection of the report. We find no circumstances which suggest that petitioner might have received a shorter sentence than the one imposed if he had been afforded the opportunity to comment on the contents of the presentence report. The report contained information that was both favorable and unfavorable to the petitioner, and none of the latter could be considered unduly prejudicial to him. Finally, the length of the sentence petitioner received supports the conclusion that no prejudice resulted to petitioner from the act of the trial judge in refusing to allow petitioner to examine the report.
Petitioner also assigns as error the refusal of a district court judge to entertain his written application, dated February 16, 1968, for a writ of habeas corpus. The application was denied because petitioner, after notice, refused to make the application on the form required by the local rule of the district court. W.D.Wash. R. 34.
The use of the specific form required by Rule 34 and the purpose for the form in habeas corpus proceedings were approved in Hooker v. United States District Court, 380 F.2d 5 (9th Cir. 1967). Further, we note that petitioner raised the same points in a later “Motion to Discharge Petitioner” as he raised in the rejected application of February 16, 1968. The “Motion to Discharge Petitioner” was treated as a motion pursuant to 28 U.S.C. § 2255 by the District Court and constitutes petition #23819 disposed of above. Thus, no harm to petitioner resulted from the rejection of his written application.
The decision of the district court in each instance is affirmed.
. This rule of discretion is not uniformly followed by the States. See, e. g., State v. Kunz, 55 N.J. 128, 259 A.2d 895 (1969). A proposed amendment to the Federal Rules of Criminal Procedure would make the disclosure of the material in a presentence report mandatory in most instances. Proposed Amendments to Criminal Rules, Rule 32.2(c) (1), 48 F.R.D. 553, 614-615 (1970).
. The maximum sentence possible was seventy-five years.
Question: What is the nature of the first listed appellant?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_applfrom
|
E
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court).
C. George SWALLOW, Appellant, v. UNITED STATES of America, Appellee.
No. 7405.
United States Court of Appeals Tenth Circuit
Dec. 12, 1963.
Joseph Keig, Sr., Chicago, Ill., for appellant.
Lawrence M. Henry, Denver, Colo., for appellee.
Before PICKETT, LEWIS and BREITENSTEIN, Circuit Judges.
PER CURIAM.
Appellant, Swallow, was convicted of income tax law violations, and his conviction was affirmed on appeal. Swallow v. United States, 10 Cir., 307 F.2d 81, cert. denied 371 U.S. 950, 83 S.Ct. 504, 9 L.Ed.2d 499, reh. denied 372 U.S. 925, 83 S.Ct. 718, 9 L.Ed.2d 731. By motion under 28 U.S.C. § 2255, he alleges that the statutes under which he was convicted are unconstitutional and the sentence therefore void. It is asserted in the motion that the income tax laws and regulations are so complex that it is impossible for a taxpayer to comprehend and comply with them, and, therefore, violate the Fifth Amendment to the Constitution of the United States; that such laws, when considered as a whole, are unconstitutionally arbitrary, unfair and discriminatory; that the tax proceeds are used for unconstitutional purposes such as the economic welfare of certain groups of taxpayers, foreign people and foreign governments; and, finally, it is alleged that certain provisions of the Internal Revenue Code violate the establishment of religion clause of the First Amendment to the Constitution. Swallow appeals from an order denying the motion.
The income tax provisions of the Internal Revenue Code and the regulations promulgated thereunder are complex and often difficult of understanding, but we have found no authority which suggests that statutes are unconstitutional for this reason or that the rates constitute a taking of property within the meaning of the Fifth Amendment. It is now well settled that the income tax laws are not unconstitutional under the due process clause of the Fifth. Amendment, nor are they unconstitutionally defective because of discriminatory progressive tax rates. Brushaber v. Union Pacific R. Co., 240 U.S. I, 36 S.Ct. 236, 60 L.Ed. 493; Knowlton v. Moore, 178 U.S. 41, 20 S.Ct. 747, 44 L.Ed. 969; Acker v. Commissioner, 6 Cir., 258 F.2d 568, aff’d 361 U.S. 87, 80 S.Ct. 144, 4 L.Ed.2d 127.
There is no merit to the contentions that the income tax laws are unconstitutional because the tax proceeds are used to promote the economic welfare of another group of taxpayers or foreign governments and their people. A federal court will not review the foreign policy of the government or the wisdom of the congressional appropriations for welfare purposes. This is an area exclusively within the jurisdiction of the legislative and executive branches, even when the allegation is made that income tax monies are being used to carry on an aggressive war. Farmer v. Rountree, D.C.Tenn., 149 F.Supp. 327, aff’d 6 Cir., 252 F.2d 490, cert. denied 357 U.S. 906, 78 S.Ct. 1150, 2 L.Ed.2d 1156, reh. denied 358 U.S. 858, 79 S.Ct. 14, 3 L.Ed.2d 92. Cf. Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078. In Whetstone v. United States, N.D.Ill., 82 F.Supp. 478, 479, cert. denied 337 U.S. 941, 69 S.Ct. 1519, 93 L.Ed. 1746, reh. denied 338 U.S. 840, 70 S.Ct. 36, 94 L.Ed. 514, the court said:
“Congress alone has the power to appropriate money to promote the general welfare and its determination that certain projects are in furtherance of general welfare is decisive. Courts are not concerned with the wisdom of legislative policies, their only function being to interpret the statutes so as to promote and effectuate the disclosed intent of Congress.”
Nor is there any substance to appellant’s contention that exemptions and deductions allowable for charitable and religious purposes contravene the establishment of religion clause of the First Amendment. Abraham J. Muste v. Commissioner, 35 T.C. 913. Constitutional questions will not be decided upon hypothetical sets of facts. Crane-Johnson Co. v. C. I. R., 8 Cir., 105 F.2d 740, aff’d 311 U.S. 54, 61 S.Ct. 114, 85 L.Ed. 35. Moreover, appellant has not shown how his rights could be affected if these activities were held to be unlawful.
Affirmed.
. Many of the contentions made here are the same as those considered in the case of Brushaber v. Union Pacific R. Co., 240 U.S. 1, at pp. 24, 25, 26, 36 S.Ct. at p. 244, where it was said:
“So far as the due process clause of the Fifth Amendment is relied upon, it suffices to say that there is no basis for such reliance since it is equally well settled that such clause is not a limitation upon the taxing power conferred upon Congress by the Constitution; in other words, that the Constitution does not con- . flict with itself by conferring upon the one hand a taxing power and taking the. same power away on the other by the limitations of the due process clause.”
“In fact, comprehensively surveying all the contentions relied upon, aside from the erroneous construction of the Amendment which we have previously disposed of, we cannot escape the conclusion that they all rest upon the mistaken theory that although there be differences between the subjects taxed, to differently tax them transcends, the limit of taxation and amounts to a want of due process, and that where a tax levied is believed by one who resists its enforcement to be wanting in wisdom and to operate injustice, from that fact in the nature ■ of things there arises a want of due process of law and a resulting authority in the judiciary to exceed its powers and correct what is assumed to be mistaken- or unwise exertions by the legislative authority of its lawful powers, even although there be no semblance of warrant in the Constitution for so doing.”
Question: What is the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court)?
A. Trial (either jury or bench trial)
B. Injunction or denial of injunction or stay of injunction
C. Summary judgment or denial of summary judgment
D. Guilty plea or denial of motion to withdraw plea
E. Dismissal (include dismissal of petition for habeas corpus)
F. Appeals of post judgment orders (e.g., attorneys' fees, costs, damages, JNOV - judgment nothwithstanding the verdict)
G. Appeal of post settlement orders
H. Not a final judgment: interlocutory appeal
I. Not a final judgment: mandamus
J. Other (e.g., pre-trial orders, rulings on motions, directed verdicts) or could not determine nature of final judgment
K. Does not fit any of the above categories, but opinion mentions a "trial judge"
L. Not applicable (e.g., decision below was by a federal administrative agency, tax court)
Answer:
|
sc_petitioner
|
108
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the petitioner of the case. The petitioner is the party who petitioned the Supreme Court to review the case. This party is variously known as the petitioner or the appellant. Characterize the petitioner as the Court's opinion identifies them.
Identify the petitioner by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the petitioner is actually single entity or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single petitioner, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
MICHAEL M. v. SUPERIOR COURT OF SONOMA COUNTY (CALIFORNIA, REAL PARTY IN INTEREST)
No. 79-1344.
Argued November 4, 1980
Decided March 23, 1981
Rehnquist, J., announced the judgment of the Court and delivered an opinion, in which Burger, C. J., and Stewart and Powell, JJ., joined. Stewart, J., filed a concurring opinion, post, p. 476. Blackmun, J., filed an opinion concurring in the judgment, post, p. 481. Brennan, J., filed a dissenting opinion, in which White and Marshall, JJ., joined, post, p. 488. Stevens, J., filed a dissenting opinion; post, p. 496.
Gregory F. Jilka argued the cause and filed a brief for petitioner.
Sandy B. Kriegler, Deputy Attorney General of California, argued the cause for respondent. With him on the brief were George Deukmejian, Attorney General, Robert H. Phili-bosian, Chief Assistant Attorney General, S. Clark Moore, Assistant Attorney General, and William R. Pounders, Deputy Attorney General.
Briefs of amici curiae urging reversal were filed by Bruce J. Ennis, Jr., for the American Civil Liberties Union et al; and by John W. Karr for the Women’s Legal Defense Fund.
Solicitor General McCree, Assistant Attorney General Heymann, and Sara Criscitelli filed a brief for the United States as amicus curiae urging affirmance.
Justice Rehnquist
announced the judgment of the Court and delivered an opinion, in which The Chief Justice, Justice Stewart, and Justice Powell joined.
The question presented in this case is whether California’s “statutory rape” law, § 261.5 of the Cal. Penal Code Ann. (West Supp. 1981), violates the Equal Protection Clause of the Fourteenth Amendment. Section 261.5 defines unlawful sexual intercourse as “an act of sexual intercourse accomplished with a female not the wife of the perpetrator, where the female is under the age of 18 years.” The statute thus makes men alone criminally liable for the act of sexual intercourse.
In July 1978, a complaint was filed in the Municipal Court of Sonoma County, Cal., alleging that petitioner, then a 17%-year-old male, had had unlawful sexual intercourse with a female under the age of 18, in violation of § 261.5. The evidence adduced at a preliminary hearing showed that at approximately midnight on June 3, 1978, petitioner and two friends approached Sharon, a 16%-year-old female, and her sister as they waited at a bus stop. Petitioner and Sharon, who had already been drinking, moved away from the others and began to kiss. After being struck in the face for rebuffing petitioner’s initial advances, Sharon submitted to sexual intercourse with petitioner. Prior to trial, petitioner sought to set aside the information on both state and federal constitutional grounds, asserting that § 261.5 unlawfully discriminated on the basis of gender. The trial court and the California Court of Appeal denied petitioner’s request for relief and petitioner sought review in the Supreme Court of California.
The Supreme Court held that “section 261.5 discriminates on the basis of sex because only females may be victims, and only males may violate the section.” 25 Cal. 3d 608, 611, 601 P. 2d 572, 574. The court then subjected the classification to “strict scrutiny,” stating that it must be justified by a compelling state interest. It found that the classification was “supported not by mere social convention but by the immutable physiological fact that it is the female exclusively who can become pregnant.” Ibid. Canvassing “the tragic human costs of illegitimate teenage pregnancies,” including the large number of teenage abortions, the increased medical risk associated with teenage .pregnancies, and the social consequences of teenage childbearing, the court concluded that the State has a compelling interest in preventing such pregnancies. Because males alone can “physiologically cause the result which the law properly seeks to avoid,” the court further held that the gender classification was readily justified as a means of identifying offender and victim. For the reasons stated below, we affirm the judgment of the California Supreme Court.
As is evident from our opinions, the Court has had some difficulty in agreeing upon the proper approach and analysis in cases involving challenges to gender-based classifications. The issues posed by such challenges range from issues of standing, see Orr v. Orr, 440 U. S. 268 (1979), to the appropriate standard of judicial review for the substantive classification. Unlike the California Supreme Court, we have not held that gender-based classifications are “inherently suspect” and thus we do not apply so-called “strict scrutiny” to those classifications. See Stanton v. Stanton, 421 U. S. 7 (1975). Our cases have held, however, that the traditional minimum rationality test takes on a somewhat “sharper focus” when gender-based classifications are challenged. See Craig v. Boren, 429 U. S. 190, 210 n." (1976) (Powell, J., concurring). In Reed v. Reed, 404 U. S. 71 (1971), for example, the Court stated that a gender-based classification will be upheld if it bears a “fair and substantial relationship” to legitimate state ends, while in Craig v. Boren, supra, at 197, the Court restated the test to require the classification to bear a “substantial relationship” to “important governmental objectives.”
Underlying these decisions is the principle that a legislature may not “make overbroad generalizations based on sex which are entirely unrelated to any differences between men and women or which demean the ability or social status of the affected class.” Parham v. Hughes, 441 U. S. 347, 354 (1979) (plurality opinion of Stewart, J.). But because the Equal Protection Clause does not “demand that a statute necessarily apply equally to all persons” or require “ 'things which are different in fact... to be treated in law as though they were the same/ ” Rinaldi v. Yeager, 384 U. S. 305, 309 (1966), quoting Tigner v. Texas, 310 U. S. 141, 147 (1940), this Court has consistently upheld statutes where the gender classification is not invidious, but rather realistically reflects the fact that the sexes are not similarly situated in certain circumstances. Parham v. Hughes, supra; Califano v. Webster, 430 U. S. 313 (1977); Schlesinger v. Ballard, 419 U. S. 498 (1975); Kahn v. Shevin, 416 U. S. 351 (1974). As the Court has stated, a legislature may “provide for the special problems of women.” Weinberger v. Wiesenfeld, 420 U. S. 636, 653 (1975).
Applying those principles to this case, the fact that the California Legislature criminalized the act of illicit sexual intercourse with a minor female is a sure indication of its intent or purpose to discourage that conduct. Precisely why the legislature desired that result is of course somewhat less clear. This Court has long recognized that “[¿Inquiries into congressional motives or purposes are a hazardous matter,” United States v. O’Brien, 391 U. S. 367, 383-384 (1968); Palmer v. Thompson, 403 U. S. 217, 224 (1971), and the search for the “actual” or “primary” purpose of a statute is likely to be elusive. Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U. S. 252, 265 (1977); McGinnis v. Royster, 410 U. S. 263, 276-277 (1973). Here, for example, the individual legislators may have voted for the statute for a variety of reasons. Some legislators may have been concerned about preventing teenage pregnancies, others about protecting young females from physical injury or from the loss of “chastity,” and still others about promoting various religious and moral attitudes towards premarital sex.
The justification for the statute offered by the State, and accepted by the Supreme Court of California, is that the legislature sought to prevent illegitimate teenage pregnancies. That finding, of course, is entitled to great deference. Reitman v. Mulkey, 387 U. S. 369, 373-374 (1967). And although our cases establish that the State’s asserted reason for the enactment of a statute may be rejected, if it “could not have been a goal of the legislation,” Weinberger v. Wiesenfeld, supra, at 648, n. 16, this is not such a case.
We are satisfied not only that the prevention of illegitimate pregnancy is at least one of the “purposes” of the statute, but also that the State has a strong interest in preventing such pregnancy. At the risk of stating the obvious, teenage pregnancies, which have increased dramatically over the last two decades, have significant social, medical, and economic consequences for both the mother and her child, and the State. Of particular concern to the State is that approximately half of all teenage pregnancies end in abortion. And of those children who are born, their illegitimacy makes them likely candidates to become wards of the State.
We need not be medical doctors to discern that young men and young women are not similarly situated with respect to the problems and the risks of sexual intercourse. Only women may become pregnant, and they suffer disproportionately the profound physical, emotional, and psychological consequences of sexual activity. The statute at issue here protects women from sexual intercourse at an age when those consequences are particularly severe.
The question thus boils down to whether a State may attack the problem of sexual intercourse and teenage pregnancy directly by prohibiting a male from having sexual intercourse with a minor female. We hold that such a statute is sufficiently related to the State’s objectives to pass constitutional muster.
Because virtually all of the significant harmful and inescapably identifiable consequences of teenage pregnancy fall on the young female, a legislature acts well within its authority when it elects to punish only the participant who, by nature, suffers few of the consequences of his conduct. It is hardly unreasonable for a legislature acting to protect minor females to exclude them from punishment. Moreover, the risk of pregnancy itself constitutes a substantial deterrence to young females. No similar natural sanctions deter males. A criminal sanction imposed solely on males thus serves to roughly “equalize” the deterrents on the sexes.
We are unable to accept petitioner’s contention that the statute is impermissibly underinclusive and must, in order to pass judicial scrutiny, be broadened so as to hold the female as criminally liable as the male. It is argued that this statute is not necessary to deter teenage pregnancy because a gender-neutral statute, where both male and female would be subject to prosecution, would serve that goal equally well. The relevant inquiry, however, is not whether the statute is drawn as precisely as it might have been, but whether the line chosen by the California Legislature is within constitutional limitations. Kahn v. Shevin, 416 U. S., at 356, n. 10.
In any event, we cannot say that a gender-neutral statute would be as effective as the statute California has chosen to enact. The State persuasively contends that a gender-neutral statute would frustrate its interest in effective enforcement. Its view is that a female is surely less likely to report violations of the statute if she herself would be subject to criminal prosecution. In an area already fraught with prose-cutorial difficulties, we decline to hold that the Equal Protection Clause requires a legislature to enact a statute so broad that it may well be incapable of enforcement.
We similarly reject petitioner’s argument that § 261.5 is impermissibly overbroad because it makes unlawful sexual intercourse with prepubescent females, who are, by definition, incapable of becoming pregnant. Quite apart from the fact that the statute could well be justified on the grounds that very young females are particularly susceptible to physical injury from sexual intercourse, see Rundlett v. Oliver, 607 F. 2d 495 (CA1 1979), it is ludicrous to suggest that the Constitution requires the California Legislature to limit the scope of its rape statute to older teenagers and exclude young girls.
There remains only petitioner’s contention that the statute is unconstitutional as it is applied to him because he, like Sharon, was under 18 at the time of sexual intercourse. Petitioner argues that the statute is flawed because it presumes that as between two persons under 18, the male is the culpable aggressor We find petitioner’s contentions unpersuasive. Contrary to his assertions, the statute does not rest on the assumption that males are generally the aggressors. It is instead an attempt by a legislature to prevent illegitimate teenage pregnancy by providing an additional deterrent for men. The age of the man is irrelevant since young men are as capable as older men of inflicting the harm sought to be. prevented.
In upholding the California statute we also recognize that this is not a case where a statute is being challenged on the grounds that it “invidiously discriminates” against females. To the contrary, the statute places a burden on males which is not shared by females. But we find nothing to suggest that men, because of past discrimination or peculiar disadvantages, are in need of the special solicitude of the courts. Nor is this a case where the gender classification is made “solely for . . . administrative convenience,” as in Frontiero v. Richardson, 411 U. S. 677, 690 (1973) (emphasis omitted), or rests on “the baggage of sexual stereotypes” as in Orr v. Orr, 440 U. S., at 283. As we have held, the statute instead reasonably reflects the fact that the consequences of sexual intercourse and pregnancy fall more heavily on the female than on the male.
Accordingly the judgment of the California Supreme Court is
Affirmed.
The lower federal courts and state courts have almost uniformly concluded that statutory rape laws are constitutional. See, e. g., Rundlett v. Oliver, 607 F. 2d 495 (CA1 1979); Hall v. McKenzie, 537 F. 2d 1232 (CA4 1976); Hall v. State, 365 So. 2d 1249, 1252-1253 (Ala. App. 1978), cert. denied, 365 So. 2d 1253 (Ala. 1979); State v. Gray, 122 Ariz. 445, 446-477, 595 P. 2d 990, 991-992 (1979); People v. Mackey, 46 Cal. App. 3d 755, 760-761, 120 Cal. Rptr. 157, 160, cert. denied, 423 U. S. 951 (1975); People v. Salinas, 191 Colo. 171, 551 P. 2d 703 (1976); State v. Brothers, 384 A. 2d 402 (Del. Super. 1978); In re W. E. P., 318 A. 2d 286, 289-290 (DC 1974); Barnes v. State, 244 Ga. 302, 303-304, 260 S. E. 2d 40, 41-42 (1979); State v. Drake, 219 N. W. 2d 492, 495-496 (Iowa 1974); State v. Bell, 377 So. 2d 303 (La. 1979); State v. Rundlett, 391 A. 2d 815 (Me. 1978); Green v. State, 270 So. 2d 695 (Miss. 1972); In re J. D. G., 498 S. W. 2d 786, 792-793 (Mo. 1973); State v. Meloon, 116 N. H. 669, 366 A. 2d 1176 (1976); State v. Thompson, 162 N. J. Super. 302, 392 A. 2d 678 (1978); People v. Whidden, 51 N. Y. 2d 457, 415 N. E. 2d 927 (1980); State v. Wilson, 296 N. C. 298, 311-313, 250 S. E. 2d 621, 629-630 (1979); Olson v. State, 588 P. 2d 1018 (Nev. 1979); State v. Elmore, 24 Ore. App. 651, 546 P. 2d 1117 (1976); State v. Ware, - R. I. -, 418 A. 2d 1 (1980); Roe v. State, 584 S. W. 2d 257, 259 (Tenn. Crim. App. 1979); Ex parte Groves, 571 S. W. 2d 888, 892-893 (Tex. Crim. App. 1978); Moore v. McKenzie, 236 S. E. 2d 342, 342-343 (W. Ya. 1977) ; Flores v. State, 69 Wis. 2d 509, 510-511, 230 N. W. 2d 637, 638 (1975). Contra, Navedo v. Preisser, 630 F. 2d 636 (CA8 1980); United States v. Hicks, 625 F. 2d 216 (CA9 1980); Meloon v. Helgemoe, 564 F. 2d 602 (CA1 1977) (limited in Rundlett v. Oliver, supra), cert. denied, 436 U. S. 950 (1978).
The statute was enacted as part of California’s' first penal code in 1850, 1850 Cal. Stats., ch. 99, § 47, p. 234, and recodified and amended in 1970.
In 1976 approximately one million 15-
Question: Who is the petitioner of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
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songer_usc1
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26
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited title of the U.S. Code in the headnotes to this case. Answer "0" if no U.S. Code titles are cited. If one or more provisions are cited, code the number of the most frequently cited title.
Homer L. BLACKWELL, Appellant, v. UNITED STATES of America, Appellee.
No. 15552.
United States Court of Appeals Eighth Circuit.
May 7, 1957.
James J. Waters, Kansas City, Mo., for appellant.
William O. Russell, Asst. U. S. Atty., Kansas City, Mo. (Edward L. Scheufler, U. S. Atty., Kansas City, Mo., was with him on the brief), for appellee.
Before WOODROUGH, VOGEL, and VAN OOSTERHOUT, Circuit Judges.
VAN OOSTERHOUT, Circuit Judge.
This is an appeal from judgment imposing sentences upon defendant after his conviction by a jury upon all counts of a 4-count indictment. Each count of the indictment charged defendant with filing a fraudulent income tax return with willful intent to evade income tax due, in violation of section 145(b), 26 U.S.C. Count I charged that defendant filed a false income tax return for 1948, wherein his stated income was $2,391.54 and the tax due thereon was $98.20, whereas, as defendant well knew, his net income was $18,270.83, upon which he owed an income tax of $3,550.48. Count II charged that defendant filed a false income tax return for 1949, wherein he stated that he suffered a loss of $10,603.41 and that no tax was due thereon, whereas, as defendant well knew, his net income was $3,651.91, upon which he owed an income tax of $407.02. Count III charged that defendant filed a false income tax return for 1950, wherein his stated income was $313.60 and no tax was due thereon, whereas, as defendant well knew, his net income was $10,993.-21, upon which he owed an income tax of $1,921.08. Count IV charged that defendant filed a false income tax return for 1951, wherein his stated income was $6,819.31 and the tax due thereon was $1,178.72, whereas, as defendant well knew, his net income was $16,657.65, upon which he owed an income tax of $3,829.30.
During the years involved in the indictment defendant was the sole proprietor of a wholesale furniture business at Kansas City, Missouri, and during such years this business was his only source of income except for a modest amount of interest and dividends. Defendant’s records consisted of an inventory file; a record of charge sales showing purchaser, amount of payment, date paid, and discount allowed; check stubs; cancelled checks; bank statements; and a “little black book.” Any merchandise not sold on credit was treated as a cash sale whether paid for in currency or by check. The only record of cash sales preserved was a monthly total entered in the little black book. Originally there was an order, invoice, or notation with reference to cash sales. After the monthly total of cash sales was taken and entered in the little black book, such records were destroyed. There was no safe in the office so any currency received was handled and taken care of by defendant.
The internal revenue agents investigating defendant’s returns determined that the defendant’s records did not properly reflect his income, and proceeded to determine defendant’s net income for the indictment years by the net worth method. The revenue agents also offered proof to the effect that the bank deposits during the period under investigation exceeded defendant’s reported receipts.
Defendant contends his books properly reflect his income and that he has fully reported his income and paid the tax due thereon. His explanation of the net worth increases claimed by the Government, and the excess of deposits over receipts, is that he had since 1936 a hoard of cash of $80,000 to $100,000, and that this was put into the business as needed.
Defendant was bom in 1900. In explanation of his cash hoard he testified! that he started earning money when he was in high school, at which time he was engaged in the “jitney” business, and that he engaged thereafter in various enterprises, including a trucking-business, an oil business, a theatre operation, an advertising business, a printing business, and a poster business. He concedes that a number of said ventures were not too successful, and claims his greatest success in the poster business in which he was engaged from about 1926 to 1940. He contends that by 1936 he had accumulated between $80,000 and $100,000 in currency which he kept in a bank deposit box, and that the hoard was still available on December 31, 1947.
In determining defendant’s opening-met worth, the Government did not credit him with the cash hoard claimed, but gave him credit only for such cash and bank deposits it was able to verify as being on hand on December 31, 1947.
Defendant asserts that the court com-mitted prejudicial error entitling him to •reversal in the following respects:
1. ' Overruling defendant’s motion for bill of particulars.
2. Overruling defendant’s motion for judgment of acquittal at the close of all the evidence and again overruling such motion when it was .renewed after verdict.
3. Errors in admission of Government evidence.
The errors asserted will be considered in^ the order stated.
In his pre-trial motion for a bill of ■particulars, which the court overruled, defendant asked that the Government be required to say whether it claimed understatement of “gross, income” and, if ■so; the items thereof, and when, where -and by whom, and in what manner, paid to defendant; that the Government be •required to say whether it claims overstatement or duplication of deductions and expenses and, if so, to state the amount, items, classes or types, and the dates thereof; and that the Government be required to say whether its determination of defendant’s “net income” for the years in question, is based-upon “the .net worth and expenditures method” and, if so, to state the amount of assets owned, and of the liabilities owing by, and the net worth of, defendant on January 1 of. each of the four years in question, and that the Government state “in what manner it is claimed” the questioned income tax returns “were false and fraudulent.”
The Government, in its suggestions in opposition to this motion, filed about seven months before trial, stated that the additional income in each of the years involved in the indictment had been determined by the net worth method. Thus, defendant had timely notice that the Government was employing the net worth method of computation. The indictment advised the defendant of the amount of income the Government was claiming for each of the years involved.
It is well settled that a motion for bill of particulars is addressed to the sound discretion of the court, and that the court’s ruling upon such a motion should not be disturbed in the absence of an abuse of discretion. Wong Tai v. United States, 273 U.S. 77, 82, 47 S.Ct. 300, 71 L.Ed. 545; McKenna v. United States, 8 Cir., 232 F.2d 431, 435. A number of courts have held that in a net worth prosecution the most that defendant is entitled to prior to trial is the disclosure of the theory or method used by the Government to compute net income. Remmer v. United States, 9 Cir., 205 F.2d 277, 281; United States v. Caserta, 3 Cir., 199 F.2d 905, 910; United States v. Chapman, 7 Cir., 168 F.2d 997, 999.
Defendant relies upon Singer v. United States, 3 Cir., 58 F.2d 74. The Singer case is not a net worth case. Taxpayer’s business there was very complicated and the facts presented are very unusual. The Singer case is distinguished in the Caserta case, supra, decided by the same circuit, and the Remmer case, supra. Defendant also relies upon United States v. O'Connor, 2 Cir., 237 F.2d 466, 475. There, the court indicates that the rule requiring a bill of particulars should be liberally construed in net worth cases, and in footnote 10 sets out a- number of cases in which a bill of particulars was required. The court, however, found it unnecessary to decide whether the trial court had abused its discretion in denying the bill of particulars.
Upon the record in the present case we do not deem it necessary to determine whether the rule for a bill of particulars should be liberally or strictly construed. Even if the rule is to be liberally construed, we are satisfied that the court did not abuse its discretion in overruling the motion for bill of particulars in the present case. We are not persuaded that the defendant was seriously handicapped in his defense by such ruling. The principal issue was whether the defendant was entitled to have his opening net worth increased by the amount of cash which he claimed he had accumulated and hoarded prior to the years here involved. Defendant was fully informed that the Government was proceeding on the net worth theory. He had many interviews with the investigating agents and had every reason to believe that the Government was not accepting his hoard-of-cash claim. At the trial defendant offered a witness from California who claimed to have seen the cash hoard in 1935. Defendant’s business was a modest one, wholly owned and controlled by him. His information as to the nature of his assets during the indictment years was at least equal to that of the Government. No prejudicial error was committed in overruling defendant’s motion for a bill of particulars.
Defendant made a motion for judgment of acquittal at the close of all the evidence and renewed such motion after verdict. Defendant contends the court erred in overruling these motions. Defendant first argues that the evidence establishes that his records are adequate and that no error in his records has been pointed out, and contends that his income as disclosed by his records must be accepted.
Many of the problems involved in this case are settled by Holland v. United States, 348 U.S. 121, 75 S.Ct. 127, 99 L.Ed. 150. The situation with reference to the adequacy of taxpayers’ books in the Holland case is quite similar to that confronting us here. In Holland the Court states (348 U.S. at pages 131-132, 75 S.Ct. at pages 133-134):
“* * * Petitioners’ accounting system was appropriate for their business purposes; and, admittedly, the Government did not detect any specific false entries therein. Nevertheless, if we believe the Government’s evidence, as the jury did, we must conclude that the defendants’ books were more consistent than truthful, and that many items of income had disappeared before they had even reached the recording stage. * * * To protect the revenue from those who do not ‘render true accounts’, the Government must be free to use all legal evidence available to it in determining whether the story told by the taxpayer’s books accurately reflects his financial history.”
In our present case, as previously stated, the defendant preserved only monthly totals of his cash sales. The memoranda upon which the monthly totals were based were not available for checking. The investigation also disclosed that the total deposits exceeded the total receipts. It is true, as defendant contends, that if his books were accurate and complete they would reflect his entire income. There is substantial evidence of an increase in defendant’s net worth during each of the years involved in an amount considerably in excess of his reported net income. Defendant’s explanation of this increase is the hoarded cash which he placed in the business. If the Government has proven that defendant did not have this hoarded cash, then the only source for the increased net worth above the reported income would be defendant’s furniture business. The court, several times in its instructions, advised the jury in effect that, if defendant’s records reflected substantially all transactions of importance on the question of income, such records are the best evidence, and in that event the Government could not establish income by the net worth method. The evidence presented a fact question for the jury, on the adequacy and truthfulness of defendant’s records.
' The Holland case, supra, also makes it clear that the opening net worth must be established with reasonable certainty. Defendant vigorously urges that the Government’s evidence has failed to meet this requirement. Particular attack is made upon failure to include defendant’s claimed cash hoard. Much of the evidence bearing upon this issue has been set- out heretofore. Most of the items upon the opening net worth statement are taken from the defendant’s records. The real controversy is over the hoarded currency claim of the defendant. Defendant is largely dependent upon his own testimony to support the cash hoard. One witness testified that the defendant owed him about $300 for a refrigerator, and in 1935 defendant took him to the bank and paid him out of defendant’s deposit box. The witness stated that he saw a lot of money in the box, but did not know what, if anything, the box contained besides money, and did not know the denominations of the bills. The witness stated that he would have nothing to substantiate any guess that he might make as to the amount of currency in the box. This evidence is remote and very vague as to the amount of hoarded currency. The bank records indicate that the defendant had made many trips to his deposit box. Evidence was also offered to the effect that defendant was well regarded in the community and that he enjoyed a good credit standing. The witnesses so testifying did not attempt to estimate defendant’s net worth. The opening net worth of $73,000 would be sufficient to entitle the defendant to a satisfactory credit rating.
The Government’s proof to negate defendant’s currency hoard claim is largely circumstantial. Defendant’s testimony is that he filed his first income tax return in about 1933. Defendant’s accountant, on the basis of workpapers in his possession, testified as to defendant’s income for the years 1934 to 1947. During the years 1934 to 1936 defendant suffered a loss. Defendant’s highest net income in the 1937-1940 period was $1,-706. His highest net income in the 1940-1947 period was $7,500. Defendant purchased a home in 1935 and shortly thereafter mortgaged it for $4,000. He also made a number of bank loans during the period he claimed to have the currency available. Defendant made various financial statements to the First National Bank of Kansas City, Missouri, for credit purposes. Exhibit 76, dated May 15, 1945, shows cash of $18,000 and a net worth of $38,900. Exhibit 77, dated July 3, 1946, shows cash of $15,-937.43, bank deposits of $16,754.58, and a net worth of $76,009.21. Exhibit 78, dated November 1, 1948, shows cash of $14,700, bank deposits of $6,830.39, and a net worth of $97,221.25. Exhibit 79, dated August 11, 1950, shows cash of $22,000, bank deposits of $5,764.43, and a net worth of $126,392.58. Exhibit 80, dated December 31, 1950, shows bank deposits of $1,317.26 and a net worth of $118,061.42. The Government’s net worth computations as of December 31 of each year are:
Year Net Worth
1947 .................... $ 73,078.57
1948 .................... 90,327.00
1949 .................... 91,855.72
1950 .................... 97,020.82
1951 .................... 113,124.44
During the period from July 3, 1946, to December 31, 1950, the defendant’s financial statements given his bank show a net worth increase from $76,000 to $118,-000, or approximately '$42,000. From December 31,1947, to December 31,1950, the increase in net worth, as computed by the Government, amounted to approximately $24,000. The periods covered are not identical, but the trend of increasing net worth is at least as great in defendant’s financial statements as in the Government’s net worth computations. The opening inventory in the Government’s net worth statement credits defendant with cash in bank under business assets in the sum of $9,631.59 and with personal and family deposits aggregating $4,195.48. The jury was properly instructed that it is necessary for the Government to establish opening net worth with reasonable certainty, There is adequate evidence to support the Government’s opening net worth statement.
Defendant also contends that the Government has failed to investigate leads. There is an obligation on the part of the Government in net worth cases to negate reasonable explanations of the taxpayer inconsistent with guilt, In the Holland case with reference to leads, the Court, among other things, states (348 U.S. at page 138, 75 S.Ct. at page 137):
“ * * * where relevant leads are not forthcoming, the Government is not required to negate every possible source of nontaxable income, a matter peculiarly within the knowledge of the defendant.”
See also Kampmeyer v. United States, 8 Cir., 227 F.2d 313, 316.
The leads furnished by the defendant were remote, vague, and indefinite. For the most part there was no reasonable way to check up on defendant’s earnings and savings from his multiple ventures, some dating back more than 35 years, Revenue Agent Bennett testified he made such inquiries as he could at the Better Business Bureau, banks, and of various people in the theatre business. Investí-gation was also made as to the income tax defendant had paid and financial statements given banks.
The court submitted to the jury the issue of whether the Government sufficiently investigated any leads furmshed by the defendant. The record m this case supports a finding that the ■Government did all it reasonably could under the circumstances of this case to investigate relevant leads.
Defendant next urges that there is no proof of willfulness. “Willfulness ‘involves a specific intent which must be proven by independent evidence and which cannot be inferred from the mere understatement of income.’ ” Holland v. United States, supra, 348 U.S. at page 139, 75 S.Ct. at page 137, 99 L.Ed. 150. The test of willfulness is quite fully discussed in Spies v. United States, 317 U.S. 492, 499, 63 S.Ct. 364, 87 L.Ed. 418. Willfulness involves a state of mind. Direct proof of willfulness *s se^om available. A consistent Pattern of underreporting large amounts ^ncome °_r overclaiming deductions and no^ recording such items on the taxPayer s records is evidence from which willfulness may be inferred. Holland v. United States, supra; Zacher v. United States, 8 Cir., 227 F.2d 219, 224; Canton v. United States, 8 Cir., 226 F.2d 313, 321.
The record in this case contains evidence from which a jury could infer a consistent underreporting of substantial amounts of ^ income. Additionally, defendant admitted failure to report $9,000 sa^es i*1 1949 and $4,000 in 1950. Defendant explained that this was done . to ofiset some deductions which he had overlooked claiming in prior years. The weight to be given defendant’s explanation of why he did not report this in_ come was for the jury,
™0,ut fu,rther Prolonging the discussion of the voluminous evidence m case’ we tha\w? care‘ Mly examined the record, including the ongmal transcript of the evidence, and are cof “ced that f Jury queffa°n was Presented as to all the essential elements of the crime charged‘
Defendant contends that the court committed prejudicial error in receiving in evidence certain Government exhibits. Attack ig made upon the admission of Exhibit x_ ExWbit x is a chart proximately eight feet bigh and six feet wide> with red and bIack letterin en. títled «Summary of Net Worth In-creageg; Homer L> Blackwell» This ex. , hibit purports to be a chart summarizing the Government’s evidence bearing upon the various categories of assets and liabilities of the defendant involved in the computation of defendant’s net worth on December 31 of the years 1947 to 1951, inclusive. It is subdivided into 24 items. The chart was placed in the courtroom near the wall, across the room from the jury box. Each item on the chart was covered with a strip of brown paper. Immediately after the Government had offered proof to support an item on the chart, the strip covering such item was removed. After the Government had offered evidence as to all of the items on the chart, it introduced in evidence Exhibit 58 which contained the same information as Exhibit X. Defendant objected to the accuracy and completeness of the chart.
Net worth summaries, properly identified and supported by substantial evidence, are admissible in tax fraud prosecutions. Hanson v. United States, 8 Cir., 185 F.2d 61, 67; Canton v. United States, supra, 226 F.2d at page 317. The issue of whether the evidence presented established the net worth for the various years as claimed by the Government was properly submitted to the jury.
Defendant further contends Exhibit X was prejudicial because of its size and constant display in the courtroom. De-, fendant relies upon Lloyd v. United States, 5 Cir., 226 F.2d 9, and Holland v. United States, supra.
In the Holland case the Court, in speaking of the danger to be guarded against in net worth cases in order to insure an adequate appraisal of the evidence, states (348 U.S. at pages 127-128, 75 S.Ct. at page 131, 99 L.Ed. 150):
“* * * There is great danger that the jury may assume that once the Government has established the figures in its net worth computations, the crime of tax evasion automatically follows. The possibility of this increases where the jury, without guarding instructions, is allowed to take into the jury room the various charts summarizing the computations; bare figures have a way of acquiring an existence of their own, independent of the evidence which gave rise to them.”
The Lloyd case, after referring to the foregoing admonition in the Holland case, states the general rule to be that the admission of charts is discretionary with the trial court, and that its rulings are subject to review only under a clear showing of an abuse of discretion. The court concedes that the proper use of charts often makes the complex evidence upon which such charts are based more intelligible to the jury, but cautions that a trial court is charged with grave responsibility to insure that an accused is not unjustly convicted in a “trial by charts.” [226 F.2d 17.] The Lloyd case was reversed on other grounds, so the court found it unnecessary to determine whether there was an abuse of discretion in the admission of charts.
The chart in our present case has stronger evidentiary support than the one used in the Lloyd case and does not have the offensive subtitles used on the Lloyd chart. The court in our present case during the trial cautioned the jury on numerous occasions upon the consideration to be given Exhibit X, stating, among other things:
“ * * * an exhibit of this character is admissible but I caution the Jury that this is a Net Worth Statement constructed by Bureau of Internal Revenue personnel and that you are not to give any emphasis to the size of this exhibit any more than you would if you were examining it on a piece of paper of normal size. Undoubtedly the Government’s view in putting it on an easel and in this size is merely for the convenience of the Jury in seeing it.”
“But I don’t want the Jury to get any wrong idea about what this is. This is just a reflection up to now of what the witnesses have testified to, if you so believe, and you are to pay attention to and be governed by the evidence and not by what is on this exhibit, and if you don’t think the testimony sustains this exhibit, then you pay attention to the evidence and not to this exhibit, you understand ?”
The court did not permit the chart to be taken into the jury room. Under the circumstances disclosed by the record in this case, the court did not abuse its discretion in admitting Exhibit X.
Defendant also complains of the admission of Exhibits 85-88, which are Revenue Agent Concannon’s computations of tax due based upon an assumed net income. Upon objection to said exhibits, the court stated:
“I will admit these exhibits only if and providing it is clearly and definitely understood that the figures used are only assumptions; otherwise the objection will be sustained. But if it may be clearly understood that the figures used are assumptions and assuming those figures to be true, the tax would be so much, then that is proper.”
Government counsel accepted such condition. The court carefully insisted throughout Concannon’s examination that his computation of tax liability be based upon an assumed net income. The net income assumed was the amount of increase in net worth for each of the years as disclosed by Exhibit X. The issue of whether the Government had proven net income in the amount claimed was left to the jury’s determination. Thus the Government was doing no more than asking the witness a hypothetical question to the effect, “assuming the net income of so many dollars for the year in question, how much would the tax be?” It is within the trial court’s discretion to permit such expert testimony. United States v. Johnson, 319 U.S. 503, 519, 63 S.Ct. 1233, 87 L.Ed. 1546; Zacher v. United States, supra, 227 F.2d at page 228.
Finally, defendant claims error in the admission of Exhibit 90. This exhibit was a copy made by Agent Gable of a paper found in the files of defendant’s accountant. Gable discovered the instrument, which he copied, while examining, with defendant’s consent, defendant’s tax file in the accountant’s office. The exhibit purports to list at least some of the assets of the Independent Poster Company for the years 1936 to 1939, the assets totaling less than $2,000 in each year. No listing of inventory appears in the exhibit. No showing was made as to the origin or purpose of the instrument of which Exhibit 90 purports to be a copy or how such instrument got into accountant’s file or who made it. The instrument was not signed by defendant, and there is no evidence that he ever saw it. The offer of Exhibit 90 was objected to because of the indefiniteness of what was copied. The court by its remarks indicated that the question of proper identification of the exhibit had been raised.
We do not believe the instrument of which Exhibit 90 purports to be a copy was sufficiently identified to authorize the admission of Exhibit 90. See Olender v. United States, 9 Cir., 210 F.2d 795, 805, 42 A.L.R.2d 736.
The question now arises as to whether the erroneous admission of Exhibit 90 constituted prejudicial error. Errors which do not affect substantial rights shall be disregarded. Rule 52(a), Rules of Criminal Procedure, 18 U.S.C. The test for determining whether error is prejudicial is set out in Kotteakos v. United States, 328 U.S. 750, 765, 66 S.Ct. 1239, 90 L.Ed. 1557. The error is prejudicial unless the reviewing court can say with fair assurance that the judgment of the jury was not swayed by the error. In Davis v. United States, 8 Cir., 229 F.2d 181, we quote with approval from Williams v. United States, 8 Cir., 265 F. 625, as follows (229 F.2d at page 187):
“Whether prejudice results from the erroneous admission of evidence at a trial is a question that should not be considered abstractly or by way of detachment. The question is one of practical effect, when the trial as a whole and all the circumstances of the proofs are regarded.”
We now look to the facts and circumstances of this case in the light of the foregoing standards.
The basic fact issue for the jury was whether defendant had the $100,000 currency hoard which he claimed he had accumulated by 1936, and whether such hoard was still on hand on December 31, 1947. Defendant had claimed that the poster business was a most profitable business. The defendant had claimed on direct examination that in 1936 he had an inventory that cost him over $100,000. Upon cross-examination he was unable to estimate the net worth of the poster business in 1936, and couldn’t say whether such net worth was $50,000 or $5,000. Defendant conceded that after talking pictures came in in the late 1920’s the poster business was practically ruined and that by 1936 the business was unprofitable. Defendant’s income tax returns reflect that at least from 1934 until the sale of the poster business in 1940 the poster business was not profitable. In exchange for the poster business in 1940 defendant received a 5-year employment contract from the purchaser, calling for a salary of $8,000 a year.
To refute the cash hoard claim, the Government relied principally upon defendant’s income tax returns and the financial statements defendant had given to banks, and the fact that during the period defendant claimed the cash hoard he borrowed money in substantial amounts on numerous occasions and that he had mortgaged his home.
The amount of the inventory of the poster business in the 1936 to 1940 period had little, if any, bearing upon the determination of defendant’s net worth on December 31,1947. There was ample evidence to support the Government’s net worth computation without considering Exhibit 90. Upon the record before us we can say with reasonable assurance that the admission in evidence of Exhibit 90 had no substantial influence upon the verdict arrived at by the jury, and hence we conclude that the admission of Exhibit 90 could not constitute reversible error.
The court gave the jury elaborate instructions which were very fair to the defendant upon the net worth issue. An examination of the entire record convinces us that defendant had a fair trial and that the trial court has committed no prejudicial error.
The judgment appealed from is affirmed.
Question: What is the most frequently cited title of the U.S. Code in the headnotes to this case? Answer with a number.
Answer:
|
songer_procedur
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the interpretation of federal rule of procedures, judicial doctrine, or case law, and if so, whether the resolution of the issue by the court favored the appellant.
Jay MORTON, Plaintiff, Appellant, v. Jack W. BROWNE, Defendant, Appellee.
No. 7662.
United States Court of Appeals, First Circuit.
March 5, 1971.
William W. Bailey, Charlotte Amalie, Y. I., with whom Bailey, Wood & Rosenberg, Charlotte Amalie, V. I., was on brief, for appellant.
Victor M. Domenech Pico, San Juan, Puerto Rico, for appellee.
Before ALDRICH, Chief Judge, Mc-ENTEE and COFFIN, Circuit Judges.
PER CURIAM.
Although this case involves only $6,000, it has been carried on with such a plethora of motions, counter-motions and orders that the finally amended complaint itself is already item No. 35 on the docket. The court’s memorandum granting summary judgment for the plaintiff is item No. 84. No such multiplicity of work seems to us to have been necessary.
By a paper filed July 14, 1967 plaintiff disclosed that he was relying, inter alia, upon the fact that his $6,000 advance in connection with his becoming a member of the joint venture would be used to insure, as well as to outfit, the M/V SHRUB, and was so represented to him by the defendant. By his disposition plaintiff gave such testimony, indicating not only defendant's representation to this effect, but his acknowledgement of the receipt of the money. Defendant did not take out insurance, and the vessel was lost. In April 1969, when plaintiff’s motion for summary judgment came on for hearing, the court gave the defendant 14 days to file counter-affidavits and a memorandum. Defendant filed some papers with respect to a mortgage (a matter we need not pursue), but no factual affidavits. Instead, he filed a memorandum of counsel, the presently pertinent part reading,
“[Tjhere are many issues of fact presented by the pleadings * * *. [W]here there are contested questions of material facts, summary judgment must be denied. 28 U.S. C.A. Rule 56 page 382 et seq.”
The page reference makes clear that counsel was referring to the 1948 enactment of F.R.Civ.P. 56, which has been interpreted by the Third Circuit, the First Circuit contra, as permitting reliance upon the pleadings to show that facts are “contested” within the meaning of this rule. By the 1963 amendment of Rule 56(e) this construction was expressly rejected and is no longer open in any circuit. Counsel’s failure to adopt the court’s offer to receive counter-affidavits in 14 days means, therefore, that plaintiff’s testimony and affidavit stand uncontradicted and, whether or not they are true in fact, under the plain provisions of the Rule are now no longer contradictable.
The court’s opinion, insofar as it recognized a duty on the part of the defendant to the plaintiff to insure the vessel because of the undertaking in the charter party itself, seems misplaced. This was a duty assumed in favor of the vessel owner. However, defendant’s representation that plaintiff’s $6,000 would be used to acquire insurance on the vessel became a binding promise to the plaintiff, effecting a duty to insure (or else to return the money if insurance was unobtainable) upon defendant’s receipt thereof. This, as the district court said, stands uncontradicted.
The judgment of liability must stand. With respect to damages, defendant properly points out that there is no specific evidence in the record that had the vessel been insured there would have been a payment received by the plaintiff as assignee of the mortgage in the amount of $6,000. We believe that the inference was open. However, we authorize the district court to entertain further proceedings, on the matter of damages only, if defendant, with reasonable promptness, makes a substantial showing that plaintiff would not have obtained a recovery in that amount. The judgment of the district court is affirmed, subject to further proceedings consistent with this opinion.
The district court is reminded that it can make no changes that do not have our permission. Wilson Research Corp. v. Piolite Plastics Corp., 1 Cir., 1964, 336 F.2d 303.
Question: Did the interpretation of federal rule of procedures, judicial doctrine, or case law by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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sc_caseorigin
|
160
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the court in which the case originated. Focus on the court in which the case originated, not the administrative agency. For this reason, if appropiate note the origin court to be a state or federal appellate court rather than a court of first instance (trial court). If the case originated in the United States Supreme Court (arose under its original jurisdiction or no other court was involved), note the origin as "United States Supreme Court". If the case originated in a state court, note the origin as "State Court". Do not code the name of the state. The courts in the District of Columbia present a special case in part because of their complex history. Treat local trial (including today's superior court) and appellate courts (including today's DC Court of Appeals) as state courts. Consider cases that arise on a petition of habeas corpus and those removed to the federal courts from a state court as originating in the federal, rather than a state, court system. A petition for a writ of habeas corpus begins in the federal district court, not the state trial court. Identify courts based on the naming conventions of the day. Do not differentiate among districts in a state. For example, use "New York U.S. Circuit for (all) District(s) of New York" for all the districts in New York.
PRUNEYARD SHOPPING CENTER et al. v. ROBINS et al.
No. 79-289.
Argued March 18, 1980
Decided June 9, 1980
Rehnquist, J., delivered the opinion of the Court, in which BURGER, C. J., and Brennan, Stewart, Marshall, and Stevens, JJ., joined; in Parts I, II, III, and IY of which White and Powell, JJ., joined; and in all but one sentence of which Blackmun, J., joined. Marshall, J., filed a concurring opinion, post, p. 89. White, J., filed an opinion concurring in part and in the judgment, post, p. 95. Powell, J., filed an opinion concurring in part and in the judgment, in which White, J., joined, post, p. 96. Blackmun, J., filed a statement'concurring in part, post, p. 88.
Max L. Gillam argued the cause for appellants. With him on the briefs were James W. Daniels, William C. Kelly, Jr., and Thomas P. O’Donnell.
Philip L. Hammer argued the cause and filed a brief for appellees.
Elinor Hadley Stillman argued the cause for the United States as amicus curiae urging affirmance. With her on the brief were Solicitor General McCree and Deputy Solicitor General Wallace.
Briefs of amici curiae urging reversal were filed by Laurence M. Cohen and Charles H. May II for Homart Development Co.; by Dean L. Over-man and Peter N. Kyros, Jr., for the International Council of Shopping Centers; and by Joseph H. Moless, Jr., and Philip B. Kurland for Taub-man Co., Inc., et al.
Briefs of amici curiae urging affirmance were filed by Susan L. Paulus, Amitai Schwartz, and Burt Neuborne for the American Civil Liberties Union of Northern California et al.; by J. Albert Woll, Laurence Gold, and George Kaufmann for the American Federation of Labor and Congress of Industrial Organizations; by Nathan Z. Dershowitz for the American Jewish Congress et al.; and by Roger Jon Diamond for People’s Lobby, Inc.
Mr. Justice Retinquist
delivered the opinion of the Court.
We postponed jurisdiction of this appeal from the Supreme Court of California to decide the important federal constitutional questions it presented. Those are whether state constitutional provisions, which permit individuals to exercise free speech and petition rights on the property of a privately owned shopping center to which the public is invited, violate the shopping center owner’s property rights under the Fifth and Fourteenth Amendments or his free speech rights under the First and Fourteenth Amendments.
I
Appellant PruneYard is a privately owned shopping center in the city of Campbell, Cal. It covers approximately 21 acres — 5 devoted to parking and 16 occupied by walkways, plazas, sidewalks, and buildings that contain more than 65 specialty shops, 10 restaurants, and a movie theater. The PruneYard is open to the public for the purpose of encouraging the patronizing of its commercial establishments. It has a policy not to permit any visitor or tenant to engage in any publicly expressive activity, including the circulation of petitions, that is not directly related to its commercial purposes. This policy has been strictly enforced in a nondiscriminatory fashion. The PruneYard is owned by appellant Fred Sahadi.
Appellees are high school students who sought to solicit support for their opposition to a United Nations resolution against “Zionism.” On a Saturday afternoon they set up a card table in a corner of PruneYard’s central courtyard. They distributed pamphlets and asked passersby to sign petitions, which were to be sent to the President and Members of Congress. Their activity was peaceful and orderly and so far as the record indicates was not objected to by PruneYard’s patrons.
Soon after appellees had begun soliciting signatures, a security guard informed them that they would have to leave because their activity violated PruneYard regulations. The guard suggested that they move to the public sidewalk at the PruneYard’s perimeter. Appellees immediatelv left the premises and later filed this lawsuit in the California Superior Court of Santa Clara County. They sought to enjoin appellants from denying them access to the PruneYard for the purpose of circulating their petitions.
The Superior Court held that appellees were not entitled under either the Federal or California Constitution to exercise their asserted rights on the shopping center property. App. to Juris. Statement A-2. It concluded that there were “adequate, effective channels of communication for [appellees] other than soliciting on the private property of the [Prune-Yard].” Id., at A-3. The California Court of Appeal affirmed.
The California Supreme Court reversed, holding that the California Constitution protects “speech and petitioning, reasonably exercised, in shopping centers even when the centers are privately owned.” 23 Cal. 3d 899, 910, 592 P. 2d 341, 347 (1979). It concluded that appellees were entitled to conduct their activity on PruneYard property. In rejecting appellants’ contention that such a result infringed property rights protected by the Federal Constitution, the California Supreme Court observed:
“ ‘It bears repeated emphasis that we do not have under consideration the property or privacy rights of an individual homeowner or the proprietor of a modest retail establishment. As a result of advertising and the lure of a congenial environment, 25,000 persons are induced to congregate daily to take advantage of the numerous amenities offered by the [shopping center there]. A handful of additional orderly persons soliciting signatures and distributing handbills in connection therewith, under reasonable regulations adopted by defendant to assure that these activities do not interfere with normal business operations (see Diamond [v. Bland, 3 Cal. 3d 653, 665, 477 P. 2d 733, 741 (1970)]) would not markedly dilute defendant’s property rights.’ ([Diamond v. Bland, 11 Cal. 3d 331, 345, 521 P. 2d 460, 470 (1974)] (dis. opn. of Mosk, J.).)” Id., at 910-911, 592 P. 2d, at 347-348.
The California Supreme Court thus expressly overruled its earlier decision in Diamond v. Bland, 11 Cal. 3d 331, 521 P. 2d 460 (Diamond II), cert, denied, 419 U. S. 885 (1974), which had reached an opposite conclusion. 23 Cal. 3d, at 910, 592 P. 2d, at 347. Before this Court, appellants contend that their constitutionally established rights under the Fourteenth Amendment to exclude appellees from adverse use of appellants’ private property cannot be denied by invocation of a state constitutional provision or by judicial reconstruction of a State’s laws of private property. We postponed consideration of the question of jurisdiction until the hearing of the case on the merits. 444 U. S. 949. We now affirm.
II
We initially conclude that this case is properly before us as an appeal under 28 U. S. C. § 1257 (2). It has long been established that a state constitutional provision is a “statute” within the meaning of § 1257 (2). See, e. g., Torcaso v. Watkins, 367 U. S. 488, 489 (1961); Adamson v. California, 332 U. S. 46, 48, n. 2 (1947); Railway Express Agency, Inc. v. Virginia, 282 U. S. 440 (1931). Here the California Supreme Court decided that Art. 1, §§ 2 and 3, of the California Constitution gave appellees the right to solicit signatures on appellants’ property in exercising their state rights of free expression and petition. In so doing, the California Supreme Court rejected appellants’ claim that recognition of such a right violated appellants’ “right to exclude others,” which is a fundamental component of their federally protected property rights. Appeal is thus the proper method of review.
Ill
Appellants first contend that Lloyd Corp. v. Tanner, 407 U. S. 551 (1972), prevents the State from requiring a private shopping center owner to provide access to persons exercising their state constitutional rights of free speech and petition when adequate' alternative avenues of communication are available. Lloyd dealt with the question whether under the Federal Constitution a privately owned shopping center may prohibit the distribution of handbills on its property when the handbilling is unrelated to the shopping center’s operations. Id., at 552. The shopping center had adopted a strict policy against the distribution of handbills within the building complex and its malls, and it made no exceptions to this rule. Id.,'at 555. Respondents in Lloyd argued that because the shopping center was open to the public, the First Amendment prevents the private owner from enforcing the hand-billing restriction on shopping center premises. Id., at 564. In rejecting this claim we substantially repudiated the rationale of Food Employees v. Logan Valley Plaza, 391 U. S. 308 (1968), which was later overruled in Hudgens v. NLRB, 424 U. S. 507 (1976). We stated that property does not “lose its private character merely because the public is generally invited to use it for designated purposes,” and that “[t]he essentially private character of a store and its privately owned abutting property does not change by virtue of being large or clustered with other stores in a modem shopping center.” 407 U. S., at 569.
Our reasoning in Lloyd, however, does not ex proprio vigore limit the authority of the State to exercise its police power or its sovereign right to adopt in its own Constitution individual liberties more expansive than those conferred by the Federal Constitution. Cooper v. California, 386 U. S. 58, 62 (1967). See also 407 U. S., at 569-570. In Lloyd, supra, there was no state constitutional or statutory provision that had been construed to create rights to the use of private property by strangers, comparable to those found to exist by the California Supreme Court here. It is, of course, well established that a State in the exercise of its police power may adopt reasonable restrictions on private property so long as the restrictions do not amount to a taking without just compensation or contravene any other federal constitutional provision. See, e. g., Euclid v. Ambler Realty Co., 272 U. S. 365 (1926); Young v. American Mini Theatres, Inc., 427 U. S. 50 (1976). Lloyd held that when a shopping center owner opens his private property to the public for the purpose of shopping, the First Amendment to the United States Constitution does not thereby create individual rights in expression beyond those already existing under applicable law. See also Hudgens v. NLRB, supra, at 517-521.
IV
Appellants next contend that a right to exclude others underlies the Fifth Amendment guarantee against the taking of property without just compensation and the Fourteenth Amendment guarantee against the deprivation of property without due process of law.
It is true that one of the essential sticks in the bundle of property rights is the right to exclude others. Kaiser Aetna v. United States, 444 U. S. 164, 179-180 (1979). And here there has literally been a “taking” of that right to the extent that the California Supreme Court has interpreted the State Constitution to entitle its citizens to exercise free expression and petition rights on shopping center property. But it is well established that “not every destruction or injury to property by governmental action has been held to be a 'taking’ in the constitutional sense.” Armstrong v. United States, 364 U. S. 40, 48 (1960). Rather, the determination whether a state law unlawfully infringes a landowner’s property in violation of the Taking Clause requires an examination of whether the restriction on private property “forc[es] some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Id., at 49. This examination entails inquiry into such factors as the character of the governmental action, its economic impact, and its interference with reasonable investment-backed expectations. Kaiser Aetna v. United States, supra, at 175. When “regulation goes too far it will be recognized as a taking.” Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 415 (1922).
Here the requirement that appellants permit appellees to exercise state-protected rights of free expression and petition on shopping center property clearly does not amount to an unconstitutional infringement of appellants’ property rights1 under the Taking Clause. There is nothing to suggest that preventing appellants from prohibiting this sort of activity will unreasonably impair the value or use of their property as a shopping center. The PruneYard is a large commercial complex that covers several city blocks, contains numerous separate business establishments, and is open to the public at large. The decision of the California Supreme Court makes it clear that the PruneYard may restrict expressive activity by adopting time, place, and manner regulations that will minimize any interference with its commercial functions. Appellees were orderly, and they limited their activity to the common areas of the shopping center. In these circumstances, the fact that they may have “physically invaded” appellants’ property cannot be viewed as determinative.
This case is quite different from Kaiser Aetna v. United States, supra. Kaiser Aetna was a case in which the owners of a private pond had invested substantial amounts of money in dredging the pond, developing it into an exclusive marina, and building a surrounding marina community. The marina was open only to fee-paying members, and the fees were paid in part to “maintain the privacy and security of the pond.” Id., at 168. The Federal Government sought to compel free public use of the private marina on the ground that the marina became subject to the federal navigational servitude because the owners had dredged a channel connecting it to “navigable water.”
The Government’s attempt to create a public right of access to the improved pond interfered with Kaiser Aetna’s “reasonable investment backed expectations.” We held that it went “so far beyond ordinary regulation or improvement for navigation as to amount to a taking. . . .” Id., at 178. Nor as a general proposition is the United States, as opposed to the several States, possessed of residual authority that enables it to define “property” in the first instance. A State is, of course, bound by the Just Compensation Clause of the Fifth Amendment, Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 233, 236-237 (1897), but here appellants have failed to demonstrate that the “right to exclude others” is so essential to the use or economic value of their property that the state-authorized limitation of it amounted to a “taking.”
There is also little merit to appellants’ argument that they have been denied their property without due process of law. In Nebbia v. New York, 291 U. S. 502 (1934), this Court stated:
“[N] either property rights nor contract rights are absolute. . . . Equally fundamental with the private right is that of the public to regulate it in the common interest. . . .
. . [T]he guaranty of due process, as has often been held, demands only that the law shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation to the objective sought to be attained.” Id., at 523, 525.
See also Railway Express Agency, Inc. v. New York, 336 U. S. 106 (1949); Exxon Corp. v. Governor of Maryland, 437 U. S. 117, 124-125 (1978). Appellants have failed to provide sufficient justification for concluding that this test is not satisfied by the State’s asserted interest in promoting more expansive rights of free speech and petition than conferred by the Federal Constitution.
V
Appellants finally contend that a private property owner has a First Amendment right not to be forced by the State to use his property as a forum for the speech of others. They state that in Wooley v. Maynard, 430 U. S. 705 (1977), this Court concluded that a State may not constitutionally require an individual to participate in the dissemination of an ideological message by displaying it on his private property in a manner and for the express purpose that it be observed and read by .the public. This rationale applies here, they argue, because the message of Wooley is that the State may not force an individual to display any message at all.
Wooley, however, was a case in which the government itself prescribed the message, required it to be displayed openly on appellee’s personal property that was used “as part of his daily life,” and refused to permit him to take any measures to cover up the motto even though the Court found that the display of the motto served no important state interest. Here, by contrast, there are a number of distinguishing factors. Most important, the shopping center by choice of its owner is not limited to the personal use of appellants. It is instead a business establishment that is open to the public to come and go as they please. The views expressed by members of the public in passing out pamphlets or seeking signatures for a petition thus will not likely be identified with those of the owner. Second, no specific message is dictated by the State to be displayed on appellants’ property. There consequently is no danger of governmental discrimination for or against a particular message. Finally, as far as appears here appellants can expressly disavow any connection with the message by simply posting signs in the area where the speakers or handbillers stand. Such signs, for example, could disclaim any sponsorship of the message and could explain that the persons are communicating their own messages by virtue of state law.
Appellants also argue that their First Amendment rights have been infringed in light of West Virginia State Board of Education v. Barnette, 319 U. S. 624 (1943), and Miami Herald Publishing Co. v. Tornillo, 418 U. S. 241 (1974). Barnette is inapposite because it involved the compelled recitation of a message containing an affirmation of belief. This Court held such compulsion unconstitutional because it “require [d] the individual to communicate by word and sign his acceptance” of government-dictated political ideas, whether or not he subscribed to them. 319 U. S.-, at 633. Appellants are not similarly being compelled to affirm their belief in any govemmentally prescribed position or view, and they are free to publicly dissociate themselves from the views of the speakers or handbillers.
Tornillo struck down a Florida statute requiring a newspaper to publish a political candidate’s reply to criticism previously published in that newspaper. It rests on the principle that the State cannot tell a newspaper what it must print. The Florida statute contravened this principle in that it “exact[ed] a penalty on the basis of the content of a newspaper.” 418 U. S., at 256. There also was a danger in Tor-nillo that the statute would “dampe[n] the vigor and limi[t] the variety of public debate” by deterring editors from publishing controversial political statements that might trigger the application of the statute. Id., at 257. Thus, the statute was found to be an “intrusion into the function of editors.” Id., at 258. These concerns obviously are not present here.
We conclude that neither appellants’ federally recognized property rights nor their First Amendment rights have been infringed by the California Supreme Court’s decision recognizing a right of appellees to exercise state-protected rights of expression and petition on appellants’ property. The judgment of the Supreme Court of California is therefore
Affirmed.
Mr. Justice Blackmun joins the opinion of the Court-except that sentence thereof, ante, at 84, which rdads: “Nor as a general proposition is the United States, as opposed to the several States, possessed of residual authority that enables it to define 'property’ in the first instance.”
The California Supreme Court in Diamond II had reasoned:
“In this case, as in Lloyd ]_Corp. v. Tanner, 407 U. S. 551 (1972)], plaintiffs have alternative, effective channels of communication, for the customers and employees of the center may be solicited on any public sidewalks, parks and streets adjacent to the Center and in the communities in which such persons reside. Unlike the situation in Marsh [v. Alabama, 326 U. S. 501 (1946)] and [Food Employees v. Logan Valley Plaza, 391 U. S. 308 (1968)], no reason appears why such alternative means of communication would be ineffective, and plaintiffs concede that, unlike Logan, their initiative petition bears no particular relation to the shopping center, its individual stores or patrons.” 11 Cal. 3d, at 335, 521 P. 2d, at 463.
Diamond II thus held that the shopping center owner’s property rights outweighed the rights of free expression and petition asserted by the plaintiffs. Ibid.
Article 1, §2, of the California Constitution provides:
“Every person may freely speak, write and publish his or her sentiments on aE subjects, being responsible for the abuse
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Answer:
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songer_typeiss
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B
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What follows is an opinion from a United States Court of Appeals.
Your task is to determine the general category of issues discussed in the opinion of the court. Choose among the following categories. Criminal and prisioner petitions- includes appeals of conviction, petitions for post conviction relief, habeas corpus petitions, and other prisoner petitions which challenge the validity of the conviction or the sentence or the validity of continued confinement. Civil - Government - these will include appeals from administrative agencies (e.g., OSHA,FDA), the decisions of administrative law judges, or the decisions of independent regulatory agencies (e.g., NLRB, FCC,SEC). The focus in administrative law is usually on procedural principles that apply to administrative agencies as they affect private interests, primarily through rulemaking and adjudication. Tort actions against the government, including petitions by prisoners which challenge the conditions of their confinement or which seek damages for torts committed by prion officials or by police fit in this category. In addition, this category will include suits over taxes and claims for benefits from government. Diversity of Citizenship - civil cases involving disputes between citizens of different states (remember that businesses have state citizenship). These cases will always involve the application of state or local law. If the case is centrally concerned with the application or interpretation of federal law then it is not a diversity case. Civil Disputes - Private - includes all civil cases that do not fit in any of the above categories. The opposing litigants will be individuals, businesses or groups.
WESTERN UNION TELEGRAPH CO. v. WILCOX et al.
No. 10555.
Circuit Court of Appeals, Eighth Circuit.
Aug. 7, 1936.
Ralph T. Finley and Lon O. Hocker, both of St. Louis, Mo. (James C. Jones and Frank H. Sullivan, both of St. Louis, Mo., Francis R. Stark and Robert C. Barnett, both of New York City, and Jones, Hocker, Gladney & Jones and Sullivan, Reeder & Finley, all of St. Louis, Mo., on the brief), for appellant.
James L. HornBostel, of Jefferson City,. Mo. (Roy McKittrick, of Jefferson City, Mo., on the brief), for appellees.
Before STONE, WOODROUGH, and THOMAS, Circuit Judges.
WOODROUGH, Circuit Judge.
The Western Union Telegraph Company brought this suit in equity against members and the secretary of the Missouri state tax commission and the state auditor to enjoin the certification to the various counties in the state for taxation purposes of an alleged excessive and discriminatory assessment of the company’s property as of June 1, 1932. Injunction was denied after trial of the issues in the District Court, and the company has appealed. Diversity of citizenship and jurisdictional amount in controversy were shown; also want of adequate remedy at law; and no question is presented here as to the form of the suit or the sufficiency of the petition.
It appears that under the laws of Missouri the state tax commission is charged with the duty of originally assessing for taxation the property of telegraph companies such as the plaintiff on the basis of its true value in money in the same proportion as other property is assessed; said assessment being subject to equalization by the state board of equalization. The telegraph company pleaded that, although the true value of its property within the state did not exceed the sum of $4,300,000, the tax commission, at first tentatively and then, after a hearing and the introduction of evidence, finally assessed its property in Missouri in the sum of $6,556,192, which assessment the state board of equalization, after hearing, refused to reduce. Plaintiff alleged further: “That in valuing the plaintiff’s property and equalizing said assessment, said Tax Commission and Board of Equalization, under the law and in accordance with the settled practice and custom of said Commission and Board, were required to determine the value of plaintiff’s property in the State of Missouri by taking such percentage of the total value of the plaintiff’s property within and without the State of Missouri as the total mileage of the plaintiff’s poles and wires in the State of Missouri bore to the total mileage of the plaintiff’s poles and wires within and without the State of Missouri”; that, “Within the time required by the laws of the State of Missouri, the plaintiff filed * * * a statement, duly subscribed and sworn to, * * * which statement set out the kind of property composing plaintiff’s telegraph system in the State of Missouri * * * and also the number of miles of poles and miles of iron and copper wire in said State * * * ”; “that from the statements filed by the plaintiff, aforesaid, and evidence offered before said Tax Commission, said Commission had before it the facts showing the total property owned by the plaintiff within and without the State of Missouri, including the total mileage of poles and wires within and without the State of Missouri, and the total cost thereof, the average cost per mile of various kinds of property, such cost less depreciation, together with earnings of the plaintiff’s property prior to such assessment, as well as the market value of its outstanding stock and bonds, over a reasonable period of years prior to such assessment”; “that in making and approving the said assessment of $6,556,192.00, the said (Tax) Commission and- Board of Equalization deliberately, intentionally and arbitrarily grossly overassessed the plaintiff’s said property to the extent that the said assessed value was fixed in excess of $4,300,000.00, by deliberately, intentionally and arbitrarily basing said assessed value upon a cost basis alone, in total disregard of the earning power of plaintiff’s said property and the true value in money of its said property; that the valuation of plaintiff’s said property fixed by said Commission and approved by said Board of Equalization is not supported in any manner by any representative method or basis of valuation; that to arrive at any value of said property in excess of $4,300,000.00, said State Tax Commission could only have gróssly overassessed the plaintiff’s property in Missouri or considered valuations of plaintiff’s property outside of the State of Missouri, not legally forming a part of plaintiff’s property within said State; that in so valuing the plaintiff’s property, and in basing its valuation upon cost alone, and disregarding the earning power and the market value or true value in money of plaintiff’s said property, the said Commission and Board of Equalization proceeded upon a fundamentally wrong theory of valuation, for all of which said reasons the amount of such valuation in excess of $4,300,000.00 constitutes a fraud against this plaintiff, and deprives and will deprive the plaintiff of its property without due process of law,” “and denies to the plaintiff the equal protection of the laws.”
The plaintiff further alleged “that while intentionally, deliberately and arbitrarily assessing the plaintiff’s property, as aforesaid, as of June 1, 1932, for the taxes for the year 1933, grossly in excess of its true value, as aforesaid, and upon such fundamentally erroneous basis of valuation, the said State Tax Commission and State Board of Equalization deliberately, intentionally and arbitrarily fixed, approved and equalized the assessment of all other property in the State of Missouri, for the same year, in the same class for the purpose of taxation, at not to exceed eighty per cent, of its true value in money; that such action by said taxing authorities was and is a discrimination against, and a fraud upon, the plaintiff * * * ” And more particularly it was alleged that real estate and personal property were underassessed at 65 per cent, of true value and that flat reductions were made in the assessment of real and personal property, especially upon flat rates of value for livestock on account of the financial depression since 1929, and that all such underassessment has been so open and notorious that the same has developed into a well-established practice and custom of underassessment.
These claims were put in issue by the answer of the defendants, and on the trial of the case-a member of the state tax commission, Mr. A. J. Murphy, who had participated in making the assessment complained of, testified as a witness for the defendants, and narrated in detail how the assessment was arrived at and made by the board. The contentions argued in this court can be more readily introduced by a consideration of Mr. Murphy’s account of the making of the assessment.
Mr. Murphy said that the sworn return of their properties to the tax commission was supposed to be filed by the public utilities before the end of the year (in this case 1932), and the board passes on it in the spring of the following year or sometime in the summer. In its return for the tax year in question the company omitted to report certain properties amounting to around $800,000 which it had always included in the reports in previous years,' and it also claimed greatly reduced values, so that upon the face of its return its assessment would be much less than it had been. Accordingly, a study was made by Mr. Murphy, not only of the returns made by the company to the tax authorities in Missouri, but of its reports to the Interstate Commerce Commission, the . Missouri Public Service Commission, and to stockholders. Mr. Murphy prepared tables showing what the assessments of the Western Union property had been in the state of Missouri over a number of years. The assessments from 1921 to 1931 were as follows:
1921 $5,470,540.00
1922 5.724.447.00
1923 5.499.156.00
1924 5.865.121.00
1925 5.851.999.00
1926 5.840.633.00
1927 5.853.930.00
1928 5.918.248.00
1929 5.893.139.00
1930 5.955.751.00
1931 5.955.653.00
It appeared that in a period between 1926 and 1931 the property of the company, as assessed in Missouri, had only been increased $115,000, whereas the reports of the company filed with the Public Service Commission of Missouri showed that in the five-year period from 3928 to 1932 the increase of the company’s book value of plant and equipment was $69,161,168. There was nothing in the reports made by the company to the taxing authorities of Missouri from year to year showing increased valuations except that some increase of mileage of wires and poles was indicated. Examination of the returns made by the telegraph company to the taxing authorities in Missouri disclosed that the company did not report the number of miles of wire owned or operated by it in the state of Missouri or in the United States, so that, although Mr. Murphy deemed the pole and wire mileage comparison proper for state allocation purposes, no such allocation could be made from the returns made to the Missouri taxing authorities. Mr. Murphy said: “We were trying to arrive at a correct value of the properties using * * * whatever information we could get. * * * We had copies of their annual reports to the stockholders and in reading these reports we discovered that in this ten years in which we had not been increasing their assessment in Missouri they say their property has increased' 83 per cent. They did not say what kind of property hut we had information enough to know it was' similar property to that in Missouri, poles and wires and telegraphic instruments.” The company’s reports showed that “the new construction for the six years (1928-1932) * * * added to plant and equipment were: Poles $26,802,109.00; wires, $13,-548,031.00; aerial cable, $2,751,825.00; underground cable, $4,486,269.00; conduit $3,948,976.00; pneumatic tubes $1,677,804.-00; telegraphic equipment, $21,340,090.00; total additions to assets $113,232,321.00.” “We were trying to make up our minds whether this property (the telegraph company’s) should be worth more, * * * we examined their annual report and find that the company’s annual report for the fiscal year 1931 says ‘the company’s property has been expanded and intensively developed to keep pace with the growing demand for better and faster telegraph service. Additions and betterments to the plant during the twenty years ending 1931 aggregated $193,335,000.00.’” It also appeared in the reports to stockholders for 1931 that the taxes of the company throughout the United States generally were double those of ten years ago, whereas the property account had increased only 83 per cent.
With this and other information in hand, Mr. Murphy prepared tables of computations of the company’s property values and pole and wire mileages to arrive at a valuation for the assessment. He testified that in reaching the valuation upon which the assessment was made the commission did not'adopt the reproduction cost new less depreciation basis nor any other one theory. In response to the question propounded by the court to Mr. Murphy: “How did you arrive at your assessment?” Mr. Murphy said: “We arrived at that originally by the first method that I talked to you about, the reproduction cost new, comparing that with the earning statement at that time as we knew it and the sale of their securities as we knew it at that time. That was a fair average of the three methods there. The average on plans 1, 4, and 5, that is the reproduction cost new, total net income and sale of securities, which we think are the fa-ir methods. The average of those three is $6,897,350.00.” (The assessment being $6,556,192.)
Although Mr. Murphy did not testify that he was an accountant, his testimony reflects that he was competent to and did make comprehensive studies of the company’s properties from the sources referred to by him.
On the trial Mr. Murphy submitted tables which contained the figures in detail to reflect computations made according to each method employed to arrive at the value of the company’s property in Missouri. The tables so presented on the trial were not those originally compiled by the commission prior to the assessment. Mr. Murphy says: “We made tables in the light of more recent information which we” are submitting. “After this suit came up we had to make further investigation, that is the company did. The company revised their estimates. Every time they revised their figures we would have to revise ours; we would get some additional information.” The tables of computations, submitted by Mr. Murphy and received in evidence, show the valuation of the plaintiff’s property of June 1, 1932, by five different methods, summarized as follows:
(1) Reproduction Cost New Less 15% depreciation Plus 8% Going Value $7,-997,761 — $1,999,664 equals $6,792,007 plus $543,360 equals $7,335,367
(2) Prorated Book or Cast Value $9,930,871 —15% Dep. $1,489,620 equals $8,441,-241 plus 8% equals 9,116,540
(3) Plant Capitalizing Earnings over a 5-year term at 6% return equals 5,917,607
(4) Capitalizing Total Net Income at 7% 1928-1929-1930 and 6% 1931-1932 6,473,571
(5) Sale of Securities equals 6,883,113
Average of all 5 valuations $7,145,239
Assessment 6,555,690
Average of 1-4-5 6,897,350
Valuation on Cost of property*! less Depreciation plus going value * which is valuation used in the ^Equals 9,116,540 assessment of land, Town lota, and most property J
Assessment $6,555,690
72%
Voluminous testimony offered for the company was to the effect that the computations as made for the Board upon each of the several identified methods of estimating values were erroneous, that the conclusions arrived at were wrong, and that the true value of the company’s property in Missouri was only a fraction of the assessment.
On the issue of discrimination Mr. Murphy testified that the practice of the tax commission was to “make a map showing each county in the state and we put down in red ink on this map (over each county) the last previous assessment confirmed by the State Board of Equalization which, in this case is 1932, which was the assessment for 1931. Then we put a second figure in black ink, the average assessment per acre of farm land returned from each county. * * * After this map has been completed and other assessments arrived at rby the County Assessor and certified to by the Tax Commission, the Tax Commission reviews these assessments, compares the assessments with the previous year and gets these maps for probably two or three years back and sees what the general tendency in each county has been, whether it is up or down. We compare the assessment in each county (with the assessment) on lands of the surrounding counties and if we find a discrepancy or if our other information leads us to believe that any of the figures returned by the assessors are too high or too low, we increase it or decrease it and make this third set of figures which is the valuation arrived at by the Tax Commission. Then, wp certify these up to the State Board of Equalization who make an additional finding and their finding is the fourth figure on these maps which is the final assessment for the state.” In answer to the question: “Mr. Murphy, I will ask if the Tax Commission intentionally assessed the property of the plaintiff at more than its true value and other .property in the state at less than 100% of its true value in money?” Mr. Murphy answered: “No.”
The plaintiff called some fifty-odd witnesses who gave testimony tending to show that real and personal property in the state was assessed below its true value and that there had been flat reductions in the assessments upon certain classes of personal property, notably, livestock and bank stock. Many witnesses called for the defendants gave testimony tending to show that property values in Missouri had gone down much faster than taxing officers had reduced assessments, so that in the tax year in question assessed values tended to approximate closely to real values in money.
Neither of the parties made any request to the court to find specially upon any of the very numerous fact disputes developed in the large volume of testimony, and the court accordingly declared briefly and generally that it could not be found as a fact that the fair value of the plaintiff’s property as of June 1, 1932, was less than the amount at which it was assessed; nor that there was any intentional, deliberate, or arbitrary overassessment of plaintiff’s property; nor that the assessment of other property in Missouri “was not at the true value in money of that property”; and the court found “that there was no intentional deliberate nor arbitrary discrimination against the plaintiff by assessing its property at a different or higher percentage of its true value in money than the percentage of value at which other property in Missouri was assessed in 1932.” The court, accordingly, dismissed the bill.
On this appeal the contentions of the appellant relate, first, to its claim that its property was overassessed, and, second, to the claim of discrimination on account of the alleged failure to equalize the plaintiff’s assessment on the same basis of valuation as the great mass of other property in the state.
Overassessment.
As to the overassessment of the property, it has been argued for appellant that the assessment here assailed was not arrived at by the tax commission upon consideration of computations made in accordance with the several theories of valuation testified to by Mr. Murphy, but that it was, in fact, made arbitrarily by wrongfully including certain locally assessable properties and other property outside the state at grossly excessive prices and then resorting to computations merely to check or justify what had been wrongfully done. It is claimed that a so-called “work sheet” produced from the files of the commission (Exhibit, 17-A) and the testimony concerning the same would so indicate. The exhibit referred to includes an item “Other Equipment, $1,498,764,” and it is argued that the property referred to in this item was in part property that was outside of the state and that another part, amounting to at least $1,000,000, was inside of the state but locally assessable and not subject to assessment by the tax commission. On stridy of the testimony relative to this controversy, we have concluded that it was not established that the identified work sheet was intended to or did set forth the elements upon which the assessment was based by the tax commission. We have concluded that we should give credence to Mr. Murphy’s statement that the assessment was reached originally by the commission upon consideration of the several methods of computation and the combination thereof as described by him.
The appellant has also presented that the commission followed fundamentally erroneous methods to compute the value of plaintiff’s property as argued in the following contentions, which we will number, epitomize, and discuss:
1. That in its valuation upon the reproduction cost new basis the commission wrongfully included an arbitrary item of 8 per cent, for franchise or going value, amounting to $300,000.
2. That the commission included personal property to the extent of at least $1,-000,000, which was assessable by the assessors in the local subdivisions of the state and not by the state tax commission.
3. That the commission based its valuation upon book values without adequate allowance for depreciation and without due consideration of actual values, wrongfully taking (in part at least) an average value over a period of years.
4. That in its valuation by capitalization of earnings, (a) a five-year average was wrongfully taken; (b) expenses of rent on lease lines were not deducted; (c) the commission capitalized earnings on the basis of 6 per cent, instead of 7 or 8 per cent.
5. In its valuation on the sale of’ securities basis of computation the commission (a) wrongfully used a five-year average of sales values; (b) it wrongfully added stocks and bonds which plaintiff had purchased amounting to about $1,765,550; noninterest-bearing liabilities, about $13,-000,000; premiums on stocks, about $1,-163,350; and bonds owned by plaintiff and deposited as collateral for loans, $3,143,000.
1. Going Value. In estimating the value of the company’s property upon the basis of reproduction cost new less depreciation, the Board, after, deducting 15 per cent, depreciation from the' gross valuation, added to the depreciated figure an amount equal to 8 per cent, thereof as going value. Later, when the tables showing the five different methods of estimating values had been compiled, the' same addition of 8 per cent, upon the depreciated valuation was made by Mr. Murphy in reaching his valuation by his so-called prorated book or cost value. Mr. Murphy said: “In some of these computations there is an 8 per cent, going value as a part of the real value of the property. It was added, however, after taking off depreciation.” “The theory of going value is this: that in a property of this kind, spread out over the United States, that it would take at least five years to build, that you would incur three or four years taxes, interest, and everything on your securities before you get to earning a cent. You are attempting to establish the value of it at the present time. * * * So I think that is a proper element to be taxed. We assess similar values on every utility in the state. * * * Always have.”
The reasons upon which it has been found necessary in estimating the value of properties like the plaintiff’s to make an addition on account of going value have been explained and upheld by the courts in numerous cases (see Los Angeles Gas & Electric Corp. v. Railroad Comm., 289 U.S. 287, 313-319, 53 S.Ct. 637, 77 L.Ed. 1180); and we do not find fundamental error, illegality, or fraud in the addition made under the item “Going Value.” Great Northern Ry. Co. v. Weeks, 297 U.S. 135, 139, 56 S.Ct. 426, 80 L.Ed. 532; Rowley v. Chicago & N. W. Ry. Co., 293 U.S. 102, 109-111, 55 S.Ct. 55, 79 L.Ed. 222; Cumberland Coal Co. v. Board of Revision, 284 U.S. 23, 28, 52 S.Ct. 48, 76 L.Ed. 146; Iowa-Des Moines Nat. Bank v. Bennett, 284 U.S. 239, 245, 52 S.Ct. 133, 76 L.Ed. 265; Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 43 S.Ct. 190, 67 L.Ed. 340, 28 A.L. R. 979.
2. Property Claimed to be Locally Assessable. Two assignments of error and considerable portions of appellant’s brief and reply brief relate to its second contention above stated to the effect that certain property included by the Commission was locally assessable property. There is no competent evidence to establish that the property referred to in this contention ever was actually assessed by local assessors in the state or that there was a double assessment thereof by local and state assessing officers. Mr. Meigs, testifying for the telegraph company, says that “he had been told that the elements of value enumerated” had been locally assessed and that “he had been told that the reason for not including them in the returns of the company for the year in controversy was that he had been so told by Mr. Whitney, now deceased, who was tax attorney.” Whether any of the company’s property was in fact being doubly assessed, once by local assessors in the counties and again by the state tax commission, was a matter very easy of ascertainment and demonstration by the company. The Missouri statute (section 9764, R.S.Mo.1929 [Mo.St.Ann. § 9764, p. 7880]) requires the company to make a sworn return to local assessors of any of its property which is locally assessable, and no such local returns are shown. Mr. Murphy testified: “I want to say further that there is a blank sent to them (the telegraph company) to make a return of their property in each county in the state and each taxing subdivision. They reported nothing on those blanks, except the number of miles of wire and number of miles of poles. They did not give us a list of any other property in those counties or taxing subdivisions.”
Neither did the company plead that the tax commission had committed the wrong now complained of. Its pleading was, as stated, that the tax commission had arrived at its excessive assessment by other means specifically set out, not including double assessment by local officers and by state officers. The pleading referred to is the amended petition which the plaintiff was permitted to file after all of the testimony had been taken on the trial. Nor does the record disclose that this contention now seriously urged upon us was presented to the trial court. Undoubtedly the great bulk of locally assessable property belonging to the telegraph company in Missouri is in St. Louis, where it has valuable land and buildings and equipment. Mr. Murphy was very positive that those were not included in his calculations. He testified: “In making these computations I did not count in the buildings and land. * * * I eliminated those * * * they were deducted as noil-distributable property. What we recognize as and what the law recognizes as non-distributable property is lands, buildings. * * We did not include these in this calculation.” lie said that he had only included “distributable property” in his calculations and that such property was properly assessable by the state tax commission rather than by the local assessors.
Because it has been urged upon us with earnestness we have given this contention of the appellant careful consideration, but we conclude that it should not be sustained.
3. Book Values — Depreciation. The appellant pleaded and has contended upon elaborate analyses of all relevant computations and figures that the commission gave undue weight to book' values. Its argument establishes that in the depression tax year in question book values were not an accurate criterion of true value, and undoubtedly, if it could be proven that the assessment was merely the book value in that year, that would present “a fundamentally wrong theory” of valuation.
At the opening of the trial counsel for the telegraph company said: “There is no dispute about the reconstruction costs new in any value of the physical plant. There is no contest but that that is correct.” There were disputes as to what items should be properly included. The company submitted four different reports of its reproduction cost new as of June, 1932. Report No. 1 was submitted in 1932 and withdrawn because of errors. Report No. 2 was submitted in January, 1933. Report No. 3 was submitted in depositions taken by appellant in New York after institution of this suit. Report No. 4 was submitted when the case was being tried before the court. The totals of the reports are as follows:
(The assessment, $6,556,192, is exactly 75 per cent, of the above figure $8,741,589.)
In all of its reports the company took a 30% per cent, depreciation and omitted going value. Reports Nos. 2 and 3 omitted items of property aggregating $885,808 claimed to be nonassessable by the company but which were included in report No. 4, and which the defendants claim should be included. They all also omit additional items amounting to $317,935 of property which had been reported as operative property of the company to the state authorities in previous years and which ought to be included according to the defendants. The estimate of reproduction new less depreciation at 15 per cent., with 8 per cent, going value, arrived at and shown on defendants’ table of computation, was $7,335,367. Recalculation of the defendants’ three methods of computation, 1, 4, and 5, produces the following result when weighted by attributing 20 per cent, to the first method and 40 per cent, to each of the others, as follows:
Value by Reproduction Cost new less depreciation.
Method No. 1 $7,335,367
20% of this value $1,467,073
Value by Capitalization of Net Income
Method No. 4 6,473,571
4C% of this value 2,589,428
Value by Sale of Securities
Method No. 5 6,883,113
40% of this value ' 2,753,245
Value by Combination of Methods $6,809,746
Appellees’ Assessment 6,555,690
Upon consideration of these tables and the data from which they were derived, we think it cannot be held that the assessment in question was wrongfully rested on book values or on reproduction cost new less depreciation plus going value. The strength as well as the weaknesses of the reproduction cost new less depreciation method of valuation have been recognized and explained by the courts. Cleveland, C., C. & St. L. Ry. Co. v. Backus, 154 U.S. 439, 14 S.Ct. 1122, 38 L.Ed. 1041; Harris Trust & Sav. Bank v. Earl (C.C.A.8) 26 F.(2d) 617, 618; Chicago & N. W. Ry. Co. v. Eveland (C.C.A.8) 13 F.(2d) 442; Northern Pac. Ry. Co. v. Adams County (D.C.) 1 F.Supp. 163, 174, 175, 190, 191; See Standard Oil Co. v. So. Pac. Co., 268 U.S. 146, 45 S.Ct. 465, 69 L.Ed. 890. But it is an allowable method of estimating values, providing undue weight is not accorded to it. In the computations above set forth, a weight of only 20 per cent, has been accorded, and the resultant figures do not show a grossly excessive or arbitrary assessment was arrived at.
Neither do we sustain, the contention of the appellant that the only allowable depreciation was 30½ per cent. It would appear that, in view of the reports made by the company concerning the condition of the property, a less percentage could lawfully be taken for depreciation. Lindheimer v. Illinois Bell Telephone Co., 292 U.S. 151, 54 S.Ct. 658, 78 L.Ed. 1182. We have not overlooked the testimony of Mr. John B. Campbell, called as a witness on rebuttal for the telegraph company, who testified, among other things, that, as a stockholder in the company, he had received no dividends for several years and that the company’s properties in Missouri were depreciated on the average of about 50 per cent. Other testimony reflects that dividends have been earned on the stock of the company continuously since 1870, and that the lesser rate of depreciation was not improper.
4. Capitalization of Earnings. Mr. Murphy prepared several tables reflecting an estimate of the value of the company’s property in Missouri according to the capitalization of earnings method, always taking averages over a five-year period, and appellant complains that it was fundamentally erroneous to use a five-year period in computing under this method. The evidence is that the earnings of the company were at the lowest point in the tax year in question, and it is argued that, as the only value in the company is its power to earn, when its earnings fell its value for taxing purposes should be reduced to the same low level. We think it was necessary for the commission to consider the reduced earnings, but we do not agree that, because the net earnings fell to little more than a third of what they were in 1928, the assessment should be reduced to the same extent. The long-maintained stability of the company cannot be disregarded, and it was not fundamentally erroneous to consider the five-year average in the computation. Great Northern Ry. Co. v. Weeks, 297 U.S. 135, 149, 56 S.Ct. 426, 80 L.Ed. 532; Rowley v. Chicago & N. W. Ry. Co., 293 U.S. 102, 105, 55 S.Ct. 55, 79 L.Ed. 222.
In making the computation in one of the tables presented by him, Mr. Murphy capitalized net income of the system at the rate of 7 per cent, per annum for the three years 1928, 1929, and 1930, estimating the values at $319,190,540 for 1928, $330,542,-858 for 1929, and $282,528,985 for 1930, but for the two years 1931 and 1932 the valuation on this basis fell to $242,418,566 and $126,566,800 respectively upon a 6 per cent, capitalization used for those years. The appellant complains that there was fundamental error (among other things) because in making the computations the item of “expenses on rent of leased lines” was not deducted. The experts for the company claimed large deductions by reason of the rent items.
Question: What is the general category of issues discussed in the opinion of the court?
A. criminal and prisoner petitions
B. civil - government
C. diversity of citizenship
D. civil - private
E. other, not applicable
F. not ascertained
Answer:
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sc_issue_2
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01
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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue of the Court's decision. Determine the issue of the case on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis.
ARIZONA, et al., Petitioners
v.
The INTER TRIBAL COUNCIL OF ARIZONA, INC., et al.
No. 12-71.
Supreme Court of the United States
Argued March 18, 2013.
Decided June 17, 2013.
Thomas C. Horne, Attorney General, for Petitioners.
Patricia Millett, for Respondents.
Sri Srinivasan, for the United States as amicus curiae, by special leave of the Court, supporting the Respondents.
Thomas C. Horne, Attorney General of Arizona, Counsel of Record, M. Colleen Connor, Counsel of Record, Paula S. Bickett, Chief Counsel, Civil Appeals, Thomas M. Collins, Assistant Attorney General, Phoenix, AZ, Melissa G. Iyer, Burch & Cracchiolo, P.A., Phoenix, AZ, for State Petitioners.
Lawyers' Committee for Civil Rights Under Law, Jon M. Greenbaum, Robert A. Kengle, Mark A. Posner, R. Erandi Zamora, Washington, DC, Akin Gump Strauss Hauer & Feld LLP, Patricia A. Millett, Michael C. Small, Christopher M. Egleson, Washington, DC, Steptoe & Johnson LLP, David J. Bodney, Phoenix, AZ, Osborn Maledon, P.A., David B. Rosenbaum, Thomas L. Hudson, Phoenix, AZ, Inter Tribal Council of Arizona, Inc., Joe P. Sparks, The Sparks Law Firm, P.C., Scottsdale, AZ, American Civil Liberties Union Foundation, Laughlin McDonald, Atlanta, GA, AARP Foundation Litigation, Daniel B. Kohrman, Washington, DC, for Respondents.
Thomas A. Saenz, Nina Perales, Karolina J. Lyznik, Mexican American Legal Defense and Educational Fund, Inc., San Antonio, TX, Daniel R. Ortega, Jr., Ortega Law Firm, Phoenix, AZ, Karl J. Sandstrom, Perkins Coie, Washington, DC, for Jesus M. Gonzalez, Bernie Abeytia, Debbie Lopez, Georgia Morrison Flores, Southwest Voter Registration Education Project, Valle Del Sol, Friendly House, Chicanos Por La Causa, Inc., Arizona Hispanic Community Forum, Common Cause, Project Vote.
Justice SCALIA delivered the opinion of the Court.
The National Voter Registration Act requires States to "accept and use" a uniform federal form to register voters for federal elections. The contents of that form (colloquially known as the Federal Form) are prescribed by a federal agency, the Election Assistance Commission. The Federal Form developed by the EAC does not require documentary evidence of citizenship; rather, it requires only that an applicant aver, under penalty of perjury, that he is a citizen. Arizona law requires voter-registration officials to "reject" any application for registration, including a Federal Form, that is not accompanied by concrete evidence of citizenship. The question is whether Arizona's evidence-of-citizenship requirement, as applied to Federal Form applicants, is pre-empted by the Act's mandate that States " accept and use" the Federal Form.
I
Over the past two decades, Congress has erected a complex superstructure of federal regulation atop state voter-registration systems. The National Voter Registration Act of 1993 (NVRA), 107 Stat. 77, as amended, 42 U.S.C. § 1973gg et seq., "requires States to provide simplified systems for registering to vote in federal elections." Young v. Fordice, 520 U.S. 273, 275, 117 S.Ct. 1228, 137 L.Ed.2d 448 (1997). The Act requires each State to permit prospective voters to "register to vote in elections for Federal office" by any of three methods: simultaneously with a driver's license application, in person, or by mail. § 1973gg-2(a).
This case concerns registration by mail. Section 1973gg-2(a)(2) of the Act requires a State to establish procedures for registering to vote in federal elections "by mail application pursuant to section 1973gg-4 of this title." Section 1973gg-4, in turn, requires States to "accept and use" a standard federal registration form. § 1973gg-4(a)(1). The Election Assistance Commission is invested with rulemaking authority to prescribe the contents of that Federal Form. § 1973gg-7(a)(1) ; see § 15329.
The EAC is explicitly instructed, however, to develop the Federal Form "in consultation with the chief election officers of the States." § 1973gg-7(a)(2). The Federal Form thus contains a number of state-specific instructions, which tell residents of each State what additional information they must provide and where they must submit the form. See National Mail Voter Registration Form, pp. 3-20, online at http://www.eac.gov (all Internet materials as visited June 11, 2013, and available in Clerk of Court's case file); 11 CFR § 9428.3 (2012). Each state-specific instruction must be approved by the EAC before it is included on the Federal Form.
To be eligible to vote under Arizona law, a person must be a citizen of the United States. Ariz. Const., Art. VII, § 2 ; Ariz.Rev.Stat. Ann. § 16-101(A) (West 2006). This case concerns Arizona's efforts to enforce that qualification. In 2004, Arizona voters adopted Proposition 200, a ballot initiative designed in part "to combat voter fraud by requiring voters to present proof of citizenship when they register to vote and to present identification when they vote on election day." Purcell v. Gonzalez, 549 U.S. 1, 2, 127 S.Ct. 5, 166 L.Ed.2d 1 (2006) (per curiam ). Proposition 200 amended the State's election code to require county recorders to "reject any application for registration that is not accompanied by satisfactory evidence of United States citizenship." Ariz.Rev.Stat. Ann. § 16-166(F) (West Supp.2012). The proof-of-citizenship requirement is satisfied by (1) a photocopy of the applicant's passport or birth certificate, (2) a driver's license number, if the license states that the issuing authority verified the holder's U.S. citizenship, (3) evidence of naturalization, (4) tribal identification, or (5) "[o]ther documents or methods of proof ... established pursuant to the Immigration Reform and Control Act of 1986." Ibid. The EAC did not grant Arizona's request to include this new requirement among the state-specific instructions for Arizona on the Federal Form. App. 225. Consequently, the Federal Form includes a statutorily required attestation, subscribed to under penalty of perjury, that an Arizona applicant meets the State's voting requirements (including the citizenship requirement), see § 1973gg-7(b)(2), but does not require concrete evidence of citizenship.
The two groups of plaintiffs represented here-a group of individual Arizona residents (dubbed the Gonzalez plaintiffs, after lead plaintiff Jesus Gonzalez) and a group of nonprofit organizations led by the Inter Tribal Council of Arizona (ITCA)-filed separate suits seeking to enjoin the voting provisions of Proposition 200. The District Court consolidated the cases and denied the plaintiffs' motions for a preliminary injunction. App. to Pet. for Cert. 1g. A two-judge motions panel of the Court of Appeals for the Ninth Circuit then enjoined Proposition 200 pending appeal. Purcell, 549 U.S., at 3, 127 S.Ct. 5. We vacated that order and allowed the impending 2006 election to proceed with the new rules in place. Id., at 5-6, 127 S.Ct. 5. On remand, the Court of Appeals affirmed the District Court's initial denial of a preliminary injunction as to respondents' claim that the NVRA pre-empts Proposition 200's registration rules. Gonzalez v. Arizona, 485 F.3d 1041, 1050-1051 (2007). The District Court then granted Arizona's motion for summary judgment as to that claim. App. to Pet. for Cert. 1e, 3e. A panel of the Ninth Circuit affirmed in part but reversed as relevant here, holding that "Proposition 200's documentary proof of citizenship requirement conflicts with the NVRA's text, structure, and purpose." Gonzalez v. Arizona, 624 F.3d 1162, 1181 (2010). The en banc Court of Appeals agreed. Gonzalez v. Arizona, 677 F.3d 383, 403 (2012). We granted certiorari. 568 U.S. ----, 133 S.Ct. 476, 184 L.Ed.2d 296 (2012).
II
The Elections Clause, Art. I, § 4, cl. 1, provides:
"The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the places of chusing Senators."
The Clause empowers Congress to pre-empt state regulations governing the "Times, Places and Manner" of holding congressional elections. The question here is whether the federal statutory requirement that States "accept and use" the Federal Form pre-empts Arizona's state-law requirement that officials "reject" the application of a prospective voter who submits a completed Federal Form unaccompanied by documentary evidence of citizenship.
A
The Elections Clause has two functions. Upon the States it imposes the duty ("shall be prescribed") to prescribe the time, place, and manner of electing Representatives and Senators; upon Congress it confers the power to alter those regulations or supplant them altogether. See U.S. Term Limits, Inc. v. Thornton, 514 U.S. 779, 804-805, 115 S.Ct. 1842, 131 L.Ed.2d 881 (1995) ; id., at 862, 115 S.Ct. 1842 (THOMAS, J., dissenting). This grant of congressional power was the Framers' insurance against the possibility that a State would refuse to provide for the election of representatives to the Federal Congress. "[E]very government ought to contain in itself the means of its own preservation," and "an exclusive power of regulating elections for the national government, in the hands of the State legislatures, would leave the existence of the Union entirely at their mercy. They could at any moment annihilate it by neglecting to provide for the choice of persons to administer its affairs." The Federalist No. 59, pp. 362-363 (C. Rossiter ed. 1961) (A. Hamilton) (emphasis deleted). That prospect seems fanciful today, but the widespread, vociferous opposition to the proposed Constitution made it a very real concern in the founding era.
The Clause's substantive scope is broad. "Times, Places, and Manner," we have written, are "comprehensive words," which "embrace authority to provide a complete code for congressional elections," including, as relevant here and as petitioners do not contest, regulations relating to "registration." Smiley v. Holm, 285 U.S. 355, 366, 52 S.Ct. 397, 76 L.Ed. 795 (1932) ; see also Roudebush v. Hartke, 405 U.S. 15, 24-25, 92 S.Ct. 804, 31 L.Ed.2d 1 (1972) (recounts); United States v. Classic, 313 U.S. 299, 320, 61 S.Ct. 1031, 85 L.Ed. 1368 (1941) (primaries). In practice, the Clause functions as "a default provision; it invests the States with responsibility for the mechanics of congressional elections, but only so far as Congress declines to pre-empt state legislative choices." Foster v. Love, 522 U.S. 67, 69, 118 S.Ct. 464, 139 L.Ed.2d 369 (1997) (citation omitted). The power of Congress over the "Times, Places and Manner" of congressional elections "is paramount, and may be exercised at any time, and to any extent which it deems expedient; and so far as it is exercised, and no farther, the regulations effected supersede those of the State which are inconsistent therewith." Ex parte Siebold, 100 U.S. 371, 392, 25 L.Ed. 717 (1880).
B
The straightforward textual question here is whether Ariz.Rev.Stat. Ann. § 16-166(F), which requires state officials to "reject" a Federal Form unaccompanied by documentary evidence of citizenship, conflicts with the NVRA's mandate that Arizona "accept and use" the Federal Form. If so, the state law, "so far as the conflict extends, ceases to be operative." Siebold, supra, at 384. In Arizona's view, these seemingly incompatible obligations can be read to operate harmoniously: The NVRA, it contends, requires merely that a State receive the Federal Form willingly and use that form as one element in its (perhaps lengthy) transaction with a prospective voter.
Taken in isolation, the mandate that a State "accept and use" the Federal Form is fairly susceptible of two interpretations. It might mean that a State must accept the Federal Form as a complete and sufficient registration application; or it might mean that the State is merely required to receive the form willingly and use it somehow in its voter registration process. Both readings-"receive willingly" and "accept as sufficient"-are compatible with the plain meaning of the word "accept." See 1 Oxford English Dictionary 70 (2d ed. 1989) ("To take or receive (a thing offered) willingly"; "To receive as sufficient or adequate"); Webster's New International Dictionary 14 (2d ed. 1954) ("To receive (a thing offered to or thrust upon one) with a consenting mind"; "To receive with favor; to approve"). And we take it as self-evident that the "elastic" verb "use," read in isolation, is broad enough to encompass Arizona's preferred construction. Smith v. United States, 508 U.S. 223, 241, 113 S.Ct. 2050, 124 L.Ed.2d 138 (1993) (SCALIA, J., dissenting). In common parlance, one might say that a restaurant accepts and uses credit cards even though it requires customers to show matching identification when making a purchase. See also Brief for State Petitioners 40 ("An airline may advertise that it 'accepts and uses' e-tickets ..., yet may still require photo identification before one could board the airplane").
"Words that can have more than one meaning are given content, however, by their surroundings." Whitman v. American Trucking Assns., Inc., 531 U.S. 457, 466, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001) ; see also Smith, supra, at 241, 113 S.Ct. 2050 (SCALIA, J., dissenting). And reading "accept" merely to denote willing receipt seems out of place in the context of an official mandate to accept and use something for a given purpose. The implication of such a mandate is that its object is to be accepted as sufficient for the requirement it is meant to satisfy. For example, a government diktat that "civil servants shall accept government IOUs for payment of salaries" does not invite the response, "sure, we'll accept IOUs-if you pay us a ten percent down payment in cash." Many federal statutes contain similarly phrased commands, and they contemplate more than mere willing receipt. See, e.g., 5 U.S.C. § 8332(b), (m)(3) ("The Office [of Personnel Management] shall accept the certification of" various officials concerning creditable service toward civilian-employee retirement); 12 U.S.C.A. § 2605(l) (2) (Supp.2013)
("A servicer of a federally related mortgage shall accept any reasonable form of written confirmation from a borrower of existing insurance coverage"); 16 U.S.C. § 1536(p) (Endangered Species Committee "shall accept the determinations of the President" with respect to whether a major disaster warrants an exception to the Endangered Species Act's requirements); § 4026(b)(2), 118 Stat. 3725, note following 22 U.S.C. § 2751, p. 925 (FAA Administrator "shall accept the certification of the Department of Homeland Security that a missile defense system is effective and functional to defend commercial aircraft against" man-portable surface-to-air missiles); 25 U.S.C. § 1300h-6(a) ("For the purpose of proceeding with the per capita distribution" of certain funds, "the Secretary of the Interior shall accept the tribe's certification of enrolled membership"); 30 U.S.C. § 923(b) (the Secretary of Labor "shall accept a board certified or board eligible radiologist's interpretation" of a chest X ray used to diagnose black lung disease ); 42 U.S.C. § 1395w-21(e)(6)(A) ("[A] Medicare+Choice organization ... shall accept elections or changes to elections during" specified periods).
Arizona's reading is also difficult to reconcile with neighboring provisions of the NVRA. Section 1973gg-6(a)(1)(B) provides that a State shall "ensure that any eligible applicant is registered to vote in an election ... if the valid voter registration form of the applicant is postmarked" not later than a specified number of days before the election. (Emphasis added.) Yet Arizona reads the phrase "accept and use" in § 1973gg-4(a)(1) as permitting it to reject a completed Federal Form if the applicant does not submit additional information required by state law. That reading can be squared with Arizona's obligation under § 1973gg-6(a)(1) only if a completed Federal Form is not a "valid voter registration form," which seems unlikely. The statute empowers the EAC to create the Federal Form, § 1973gg-7(a), requires the EAC to prescribe its contents within specified limits, § 1973gg-7(b), and requires States to "accept and use" it, § 1973gg-4(a)(1). It is improbable that the statute envisions a completed copy of the form it takes such pains to create as being anything less than "valid."
The Act also authorizes States, "[i]n addition to accepting and using the" Federal Form, to create their own, state-specific voter-registration forms, which can be used to register voters in both state and federal elections. § 1973gg-4(a)(2) (emphasis added). These state-developed forms may require information the Federal Form does not. (For example, unlike the Federal Form, Arizona's registration form includes Proposition 200's proof-of-citizenship requirement. See Arizona Voter Registration Form, p. 1, online at http://www.azsos.gov.) This permission works in tandem with the requirement that States "accept and use" the Federal Form. States retain the flexibility to design and use their own registration forms, but the Federal Form provides a backstop: No matter what procedural hurdles a State's own form imposes, the Federal Form guarantees that a simple means of registering to vote in federal elections will be available.
Arizona's reading would permit a State to demand of Federal Form applicants every additional piece of information the State requires on its state-specific form. If that is so, the Federal Form ceases to perform any meaningful function, and would be a feeble means of "increas[ing] the number of eligible citizens who register to vote in elections for Federal office." § 1973gg(b).
Finally, Arizona appeals to the presumption against pre-emption sometimes invoked in our Supremacy Clause cases. See, e.g., Gregory v. Ashcroft, 501 U.S. 452, 460-461, 111 S.Ct. 2395, 115 L.Ed.2d 410 (1991). Where it applies, "we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947). That rule of construction rests on an assumption about congressional intent: that "Congress does not exercise lightly" the "extraordinary power" to "legislate in areas traditionally regulated by the States." Gregory, supra, at 460, 111 S.Ct. 2395. We have never mentioned such a principle in our Elections Clause cases. Siebold, for example, simply said that Elections Clause legislation, "so far as it extends and conflicts with the regulations of the State, necessarily supersedes them." 100 U.S., at 384. There is good reason for treating Elections Clause legislation differently: The assumption that Congress is reluctant to pre-empt does not hold when Congress acts under that constitutional provision, which empowers Congress to "make or alter" state election regulations. Art. I, § 4, cl. 1. When Congress legislates with respect to the "Times, Places and Manner" of holding congressional elections, it necessarily displaces some element of a pre-existing legal regime erected by the States. Because the power the Elections Clause confers is none other than the power to pre-empt, the reasonable assumption is that the statutory text accurately communicates the scope of Congress's pre-emptive intent. Moreover, the federalism concerns underlying the presumption in the Supremacy Clause context are somewhat weaker here. Unlike the States' "historic police powers," Rice, supra, at 230, 67 S.Ct. 1146, the States' role in regulating congressional elections-while weighty and worthy of respect-has always existed subject to the express qualification that it "terminates according to federal law." Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341, 347, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001). In sum, there is no compelling reason not to read Elections Clause legislation simply to mean what it says.
We conclude that the fairest reading of the statute is that a state-imposed requirement of evidence of citizenship not required by the Federal Form is "inconsistent with" the NVRA's mandate that States "accept and use" the Federal Form. Siebold, supra, at 397. If this reading prevails, the Elections Clause requires that Arizona's rule give way.
We note, however, that while the NVRA forbids States to demand that an applicant submit additional information beyond that required by the Federal Form, it does not preclude States from "deny[ing] registration based on information in their possession establishing the applicant's ineligibility." Brief for United States as Amicus Curiae 24. The NVRA clearly contemplates that not every submitted Federal Form will result in registration. See § 1973gg-7(b)(1) (Federal Form "may require only" information "necessary to enable the appropriate State election official to assess the eligibility of the applicant " (emphasis added)); § 1973gg-6(a)(2) (States must require election officials to "send notice to each applicant of the disposition of the application").
III
Arizona contends, however, that its construction of the phrase "accept and use" is necessary to avoid a conflict between the NVRA and Arizona's constitutional authority to establish qualifications (such as citizenship) for voting. Arizona is correct that the Elections Clause empowers Congress to regulate how federal elections are held, but not who may vote in them. The Constitution prescribes a straightforward rule for the composition of the federal electorate. Article I, § 2, cl. 1, provides that electors in each State for the House of Representatives "shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature," and the Seventeenth Amendment adopts the same criterion for senatorial elections. Cf. also Art. II, § 1, cl. 2 ("Each State shall appoint, in such Manner as the Legislature thereof may direct," presidential electors). One cannot read the Elections Clause as treating implicitly what these other constitutional provisions regulate explicitly. "It is difficult to see how words could be clearer in stating what Congress can control and what it cannot control. Surely nothing in these provisions lends itself to the view that voting qualifications in federal elections are to be set by Congress." Oregon v. Mitchell, 400 U.S. 112, 210, 91 S.Ct. 260, 27 L.Ed.2d 272 (1970) (Harlan, J., concurring in part and dissenting in part); see also U.S. Term Limits, 514 U.S., at 833-834, 115 S.Ct. 1842; Tashjian v. Republican Party of Conn., 479 U.S. 208, 231-232, 107 S.Ct. 544, 93 L.Ed.2d 514 (1986) (Stevens, J., dissenting). Prescribing voting qualifications, therefore, "forms no part of the power to be conferred upon the national government" by the Elections Clause, which is "expressly restricted to the regulation of the times, the places, and the manner of elections." The Federalist No. 60, at 371 (A. Hamilton); see also id., No. 52, at 326 (J. Madison). This allocation of authority sprang from the Framers' aversion to concentrated power. A Congress empowered to regulate the qualifications of its own electorate, Madison warned, could "by degrees subvert the Constitution." 2 Records of the Federal Convention of 1787, p. 250 (M. Farrand rev. 1966). At the same time, by tying the federal franchise to the state franchise instead of simply placing it within the unfettered discretion of state legislatures, the Framers avoided "render[ing] too dependent on the State governments that branch of the federal government which ought to be dependent on the people alone." The Federalist No. 52, at 326 (J. Madison).
Since the power to establish voting requirements is of little value without the power to enforce those requirements, Arizona is correct that it would raise serious constitutional doubts if a federal statute precluded a State from obtaining the information necessary to enforce its voter qualifications. If, but for Arizona's interpretation of the "accept and use" provision, the State would be precluded from obtaining information necessary for enforcement, we would have to determine whether Arizona's interpretation, though plainly not the best reading, is at least a possible one. Cf. Crowell v. Benson, 285 U.S. 22, 62, 52 S.Ct. 285, 76 L.Ed. 598 (1932) (the Court will "ascertain whether a construction of the statute is fairly possible by which the [constitutional] question may be avoided" (emphasis added)). Happily, we are spared that necessity, since the statute provides another means by which Arizona may obtain information needed for enforcement.
Section 1973gg-7(b)(1) of the Act provides that the Federal Form "may require only such identifying information (including the signature of the applicant) and other information (including data relating to previous registration by the applicant), as is necessary to enable the appropriate State election official to assess the eligibility of the applicant and to administer voter registration and other parts of the election process." At oral argument, the United States expressed the view that the phrase "may require only" in § 1973gg-7(b)(1) means that the EAC "shall require information that's necessary, but may only require that information." Tr. of Oral Arg. 52 (emphasis added); see also Brief for ITCA Respondents 46; Tr. of Oral Arg. 37-39 (ITCA Respondents' counsel). That is to say, § 1973gg-7(b)(1) acts as both a ceiling and a floor with respect to the contents of the Federal Form. We need not consider the Government's contention that despite the statute's statement that the EAC "may" require on the Federal Form information "necessary to enable the appropriate State election official to assess the eligibility of the applicant," other provisions of the Act indicate that such action is statutorily required. That is because we think that-by analogy to the rule of statutory interpretation that avoids questionable constitutionality-validly conferred discretionary executive authority is properly exercised (as the Government has proposed) to avoid serious constitutional doubt. That is to say, it is surely permissible if not requisite for the Government to say that necessary information which may be required will be required.
Since, pursuant to the Government's concession, a State may request that the EAC alter the Federal Form to include information the State deems necessary to determine eligibility, see § 1973gg-7(a)(2) ; Tr. of Oral Arg. 55 (United States), and may challenge the EAC's rejection of that request in a suit under the Administrative Procedure Act, see 5 U.S.C. §§ 701 - 706, no constitutional doubt is raised by giving the "accept and use" provision of the NVRA its fairest reading. That alternative means of enforcing its constitutional power to determine voting qualifications remains open to Arizona here. In 2005, the EAC divided 2-to-2 on the request by Arizona to include the evidence-of-citizenship requirement among the state-specific instructions on the Federal Form, App.
225, which meant that no action could be taken, see 42 U.S.C. § 15328 ("Any action which the Commission is authorized to carry out under this chapter may be carried out only with the approval of at least three of its members"). Arizona did not challenge that agency action (or rather inaction) by seeking APA review in federal court, see Tr. of Oral Arg. 11-12 (Arizona), but we are aware of nothing that prevents Arizona from renewing its request. Should the EAC's inaction persist, Arizona would have the opportunity to establish in a reviewing court that a mere oath will not suffice to effectuate its citizenship requirement and that the EAC is therefore under a nondiscretionary duty to include Arizona's concrete evidence requirement on the Federal Form. See 5 U.S.C. § 706(1). Arizona might also assert (as it has argued here) that it would be arbitrary for the EAC to refuse to include Arizona's instruction when it has accepted a similar instruction requested by Louisiana.
We hold that 42 U.S.C. § 1973gg-4 precludes Arizona from requiring a Federal Form applicant to submit information beyond that required by the form itself. Arizona may, however, request anew that the EAC include such a requirement among the Federal Form's state-specific instructions, and may seek judicial review of the EAC's decision under the Administrative Procedure Act.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
Justice KENNEDY, concurring in part and concurring in the judgment.
The opinion for the Court insists on stating a proposition that, in my respectful view, is unnecessary for the proper disposition of the case and is incorrect in any event. The Court concludes that the normal "starting presumption that Congress does not intend to supplant state law," New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995), does not apply here because the source of congressional power is the Elections Clause and not some other provision of the Constitution. See ante, at 2256 - 2257.
There is no sound basis for the Court to rule, for the first time, that there exists a hierarchy of federal powers so that some statutes pre-empting state law must be interpreted by different rules than others, all depending upon which power Congress has exercised. If the Court is skeptical of the basic idea of a presumption against pre-emption as a helpful instrument of construction in express pre-emption cases, see Cipollone v. Liggett Group, Inc., 505 U.S. 504, 545, 112 S.Ct. 260
Question: What is the issue of the decision?
01. voting
02. Voting Rights Act of 1965, plus amendments
03. ballot access (of candidates and political parties)
04. desegregation (other than as pertains to school desegregation, employment discrimination, and affirmative action)
05. desegregation, schools
06. employment discrimination: on basis of race, age, religion, illegitimacy, national origin, or working conditions.
07. affirmative action
08. slavery or indenture
09. sit-in demonstrations (protests against racial discrimination in places of public accommodation)
10. reapportionment: other than plans governed by the Voting Rights Act
11. debtors' rights
12. deportation (cf. immigration and naturalization)
13. employability of aliens (cf. immigration and naturalization)
14. sex discrimination (excluding sex discrimination in employment)
15. sex discrimination in employment (cf. sex discrimination)
16. Indians (other than pertains to state jurisdiction over)
17. Indians, state jurisdiction over
18. juveniles (cf. rights of illegitimates)
19. poverty law, constitutional
20. poverty law, statutory: welfare benefits, typically under some Social Security Act provision.
21. illegitimates, rights of (cf. juveniles): typically inheritance and survivor's benefits, and paternity suits
22. handicapped, rights of: under Rehabilitation, Americans with Disabilities Act, and related statutes
23. residency requirements: durational, plus discrimination against nonresidents
24. military: draftee, or person subject to induction
25. military: active duty
26. military: veteran
27. immigration and naturalization: permanent residence
28. immigration and naturalization: citizenship
29. immigration and naturalization: loss of citizenship, denaturalization
30. immigration and naturalization: access to public education
31. immigration and naturalization: welfare benefits
32. immigration and naturalization: miscellaneous
33. indigents: appointment of counsel (cf. right to counsel)
34. indigents: inadequate representation by counsel (cf. right to counsel)
35. indigents: payment of fine
36. indigents: costs or filing fees
37. indigents: U.S. Supreme Court docketing fee
38. indigents: transcript
39. indigents: assistance of psychiatrist
40. indigents: miscellaneous
41. liability, civil rights acts (cf. liability, governmental and liability, nongovernmental; cruel and unusual punishment, non-death penalty)
42. miscellaneous civil rights (cf. comity: civil rights)
Answer:
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songer_casetyp1_1-3-1
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Q
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "criminal - federal offense".
NEAL v. UNITED STATES
No. 11177.
Circuit Court of Appeals, Eighth Circuit.
April 3, 1939.
WOODROUGH, Circuit Judge, dissenting.
Harry S. Swensen, of Minneapolis, Minn. (Eugene A. Rerat and John Ott, both of Minneapolis, Minn., on the brief), for appellant.
Victor E. Anderson, U. S. Atty., of St. Paul, Minn. (Linus J. Hammond, Asst. U. S. Atty., of St. Paul, Minn., on the brief), for the United States.
Before STONE, WOODROUGH, and THOMAS, Circuit Judges.
THOMAS, Circuit Judge.
The appellant William Squire Neal, hereinafter called defendant, was indicted, tried and convicted in the court below upon both counts of an indictment containing two counts, and he appeals.
The first count of the indictment charged defendant with being an accessory after the fact to a felony committed by John L. Neal; and the second count charged misprision of the same felony committed by John L. Neal. The defendant was sentenced to serve in a penitentiary for two years on each count, the sentences to run concurrently and not consecutively.
Before trial the defendant interposed a demurrer to count one of the indictment, which was overruled. At the close of.the evidence he moved for a directed verdict upon both counts on the ground of insufficiency of evidence to support a verdict of guilty, which motion was overruled.
On this appeal the defendant urges that the trial court erred (1) in overruling his demurrer to count one of the indictment, (2) in overruling his motion for a directed verdict on both counts, (3) in the admission of certain evidence over his objection, (4) in permitting misconduct of the prosecuting attorney in his argument to the jury, and (5) in giving certain instructions to the jury.
Since the sentences run concurrently,.if the defendant was properly convicted upon either count of the indictment, there can not be a reversal even if there were reversible error on the trial of one of the counts. The defendant in that situation is not prejudiced by the sentence on the count in which the conviction is tainted with error. Roberts v. United States, 8 Cir., 96 F.2d 39, 40; Little v. United States, 8 Cir., 93 F.2d 401, 409; Taran v. United States, 8 Cir., 88 F.2d 54, 59; Mad-delin v. United States, 7 Cir., 46 F.2d 266; United States v. Trenton Potteries Co., 273 U.S. 392. 47 S.Ct. 377, 71 L.Ed. 700, 50 A.L.R. 989.
The alleged error most seriously pressed upon our attention, and the one involving the greatest difficulty, relates to the sufficiency of the evidence to support a conviction upon cither count. If this assignment of error be sustained the court erred in overruling defendant’s motion for a directed verdict and the judgment must be reversed. In that event it will be unnecessary to consider the other alleged errors. This question requires a consideration of the indictment and a review of the government’s evidence.
The defendant and John Neal are brothers. At all times material to this case they lived in Minneapolis, Minnesota. The defendant was married and operated an undertaking establishment. His brother John was a bachelor and lived in defendant’s home. John had been employed as a clerk or messenger in the office of the treasurer of the Soo Line railroad at Minneapolis for 32 years prior to December 28, 1937. In February, 1938, John was indicted in the United States District Court of Minnesota and charged in ten counts with stealing and carrying away various sums of money from the First National Bank and Trust Company of Minneapolis. Pie pleaded guilty on five counts and was sentenced to 15 years in a peniten-' tiary. The indictment was predicated upon the amendment of August 24, 1937, to section 2(a) of the Act of May 18, 1934, 48 Stat. 783, 12 U.S.C. § 588b, 12 U.S.C. A. § 588b. The original statute made bank robbery a crime. The pertinent part of the amendment added: “whoever shall take and carry away, with intent to steal or purloin, any property or money or any other tiling of value exceeding $50 belonging to, or in the care, custody, control, management, or possession of any bank, shall be fined not more than $5,000 or imprisoned not more than ten years, or both.”
The counts of the indictment to which John Neal pleaded guilty and on which he was sentenced charged him with stealing and carrying away from the bank $97.-50. on December 27, 1937; $97.50 on December 24, 1937; $97.50 on December 23, 1937; $95 on December 22, 1937; and $97.50 on December 21, 1937.
The crimes of accessory after the fact and misprision of felony being dependent or subsidiary offenses the indictment upon which the defendant was tried alleged two crimes in each count. John L. Neal is referred to as principal, or the one who committed the primary felony, and the defendant is charged with the dependent offenses. In each count the felony attributed to John L. Neal is that between August 24, 1937 (the date of the amendment to the bank robbery statute supra), and December 28, 1937, he stole and carried away from the possession of the First National Bank and Trust Company of Minneapolis many thousands of dollars.
In the first count the crime of which the defendant is accused is that he knowing that the principal had committed and completed the felony above described became on January 7, 1938, an accessory after the fact thereto in that he aided and assisted the principal in secreting the fruits and proceeds of the felony by clandestinely placing $5,903 of the stolen money in a golf bag in his living quarters, thus suppressing important evidence, to the end that the principal might escape punishment.
In the second count it is alleged that on or about January 7, 1938, the defendant committed the crime of misprision of felony in that with full knowledge of the felony committed by John L. Neal he concealed and failed to disclose and make known such felony as soon as might be to some one of the judges of the United States District Court of Minnesota or to the Attorney General of the United States or to the United States Attorney or to other persons in civil authority. It is further charged that the defendant took two affirmative steps to conceal the crime committed by his brother J ohn: first, he concealed $5,903 of the stolen money in a golf bag at his living quarters; and, second, he altered and expunged from the account books of the Neal Funeral Home operated by him entries showing the investment therein by John L. Neal of the stolen moneys.
To warrant a conviction by the jury on the first count of the indictment the burden was upon the government to establish beyond a reasonable doubt: (1) That John L. Neal, the principal, had committed and completed the felony charged, that is, that between August 24 and December 28, 1937, he had unlawfully taken and carried away from the First National Bank and Trust Company of Minneapolis many thousands of dollars; (2) that the defendant had knowledge that the principal had committed the felony; and (3) that having such knowledge, defendant aided and assisted the principal to escape punishment by suppressing important evidence against him in that he concealed $5,903 which constituted a large part of tfie fruits and proceeds of the offense.
To sustain a conviction on count two for misprision of felony it was incumbent upon the government to prove beyond a reasonable doubt (1) that John L. Neal, the principal, had committed and completed the felony alleged prior to January 7, 1938; (2) that the defendant had full knowledge of that fact; (3) that he failed to notify the authorities; and (4) that he took two affirmative steps to conceal the crime of the principal, viz., (a) he concealed $5903 of the stolen money in a golf bag, and (b) he knowingly altered and expunged from the books of account of the Neal Funeral Home entries showing the investment of John L. Neal therein, which, money so invested was a part of the stolen money.
In brief the evidence introduced by the government to prove the crime of the principal John L. Neal tended to establish the following facts:
John L. Neal, as a clerk or messenger in the office of the Treasurer of the Soo Line railroad company, received a salary of $140 a month. Under its system of doing business the railroad company had its station agents send their daily collections directly to the bank for deposit to the credit of the company, with the exception of rent money which they were instructed to send directly to the treasurer of the company at Minneapolis. The agent before sending the money made a deposit slip in quadruplicate one of which he retained. The money, the original and one copy of the deposit slip were sent directly to the bank and one copy was sent to the auditor of the railroad company. The envelopes containing the deposits were delivered every morning to the teller in the "railroad cage” at the bank. John L. Neal called at the teller’s cage about 10:30 in the morning and obtained the extra copy of the deposit slip and took it to the office of the treasurer of the railroad company where he made a record of receipt by the bank of the deposit after which he turned the deposit slip over to the auditor as notice that the money had been received by the bank. The auditor then returned one copy of the slip to the agent to serve as a receipt to him for the deposit.
In many instances the agents sent rent collections with the deposit to the bank instead of sending such items directly to the treasurer of the company. The rent item was separately enclosed and had an identifying mark on it indicating that it was not for deposit but was for the treasurer of the company. The railroad teller at the bank would turn over the rent items to John L. Neal for delivery to the treasurer when John called at the bank in the morning.
For a period of approximately seven years immediately preceding December 27, 1937, John L. Neal made a practice of telling the bank teller when he made his usual call that of the general deposit received from a particular agent a part thereof, for instance $97.50, was rent money and that it should be turned over to him for delivery to the treasurer. The statement was false, but the teller relying on it would turn over the amount demanded. The money turned over was not taken from the funds remitted by the particular agent "designated, but from money generally on deposit at the cage. The original deposit slip held by the bank would then be changed accordingly but not the copy which Neal took to the treasurer’s office. The money so received by him he kept. He kept an account of the items thus abstracted and covered up his offense by false entries and forged deposit slips. Neal’s record showed that the amount of money thus taken by him over the seven year period amounted to $118,280. The bank’s record showed the amount to be $82,872.50. During the entire year 1937 the amount taken was about $53,000, and after August 24, 1937, approximately $18,000 or $19,000.
John L. Neal had no express authority to withdraw money from the bank, and the teller at the bank had no instructions to turn the money over to him. The defendant claims that both John L. Neal and the bank teller had implied authority to handle the moneys the way they did, but the evidence was not such as to require the jury so to find.
The evidence on the trial of the defendant tended to show that he lived with his family upstairs over his funeral parlor in Minneapolis. His brother John lived with him. In 1935 he had his business incorporated under the name Neal Funeral Home, Inc. He was president, his wife vice president, John L. Neal treasurer, and an employee, Otis Allen, secretary. The defendant treated the business as his own. He paid no salaries to the officers and he handled the money himself. The obligations of the business were in his name, and he owned the home. His income in 1935 was $2,385.46, and in 1936, $2,739.15. Yet he had property in excess of the amount usually owned by one of such moderate income. John furnished the groceries for the family amounting to $75 to $80 a week. He also made investments in the business. During 1935, 1936, and 1937 he contributed to the business the sum of $12,970.71 in various amounts and at various times, and he withdrew during the same period the sum of $3,150, leaving a net balance of $9,820.71.
John L. Neal disappeared on the night of December 27, 1937. About 2:00 a. m. on the morning of December 28, 1937, the defendant found - on the premises $5,903 in paper currency in an old iron box. He removed the money and placed it in an old laundry bag which he placed in his closet. When questioned by officers he admitted finding only $15 of John’s money.
On the evening of December 29, 1937, the defendant called the bookkeeper for the funeral home and employed him to delete John L. Neal’s name from the books. The bookkeeper rewrote about 30 sheets having John L. Neal’s name thereon, omitting the name and substituting other explanations for the items. The rewritten sheets and the originals were turned over to defendant’s secretary Allen on January 31, 1938, but the bookkeeper then took the originals and kept them until February 17, 1938.
The evidence discloses that the defendant knew where John L. Neal was in hiding following December 27, 1937, but although examined frequently by federal investigators denied all knowledge of his whereabouts until in January, 1938. On January 5, 1938, he directed an officer to John’s hiding place, and John was arrested. On January 6, the defendant told thé officers that he had found $5,903 in an old iron box in John’s room and had placed it in a golf bag upstairs in his room.
As applicable to both counts we think there was substantial evidence to support the conclusion of the jury that John L. Neal, the principal, was guilty of the felony charged against him, and that the defendant had knowledge of that fact as alleged in the indictment. There is no claim that the defendant believed or was informed that his brother John earned or had by any honest means obtained the large sums of money which he contributed to the funeral home or from which he paid the family grocery bills. The close relationship between the two brothers precluded ignorance of each others’ resources. His conduct on and after December 28, 1937, and his concealing information of John’s whereabouts were proper subjects for the consideration of the jury, and all the circumstances taken together virtually compelled a finding of guilty knowledge. Kcliher v. United States, 1 Cir., 193 F. 8, 9; McDonald v. United States, 8 Cir., 89 F.2d 128.
The serious question under count one of the indictment is whether there is substantial evidence to support the charge that the defendant aided and assisted the principal to escape punishment by suppressing evidence against him by concealing the $5,903 found in the old iron box in a golf bag. The charge in the indictment is that the defendant concealed $5,903 which constituted a large part of the fruits and proceeds of the offense of the principal and was important evidence against him. The proof does not show when the $5,903 was placed in the old iron box by John. John’s salary was only $140 a month. Over a period of seven years he stole approximately $118,000. During 1937 he stole $53,000 of this sum, and after August 24th of that year he had taken approximately $18,000 of the amount. The money stolen prior to August 24, 1937, did not constitute a federal offense, and the stealing of money prior to that date is not charged to be a crime in the indictment. The defendant’s testimony is that when he opened the iron box on December 28, 1937, the paper money contained in it appeared to be old and was covered with a thick layer of dust. Early in January, 1938, the money was turned over to the officers, and they do not deny defendant’s testimony with reference to its condition. The money consisted of 813 one-dollar bills and $5,090 of five, ten, twenty and fifty dollar bills.
The proof clearly does not tend to show that the $5,903 was a part of the “fruits or' proceeds of the offense” of the principal, that is, that it was money stolen by John after rather than before August 24, 1937. Evidence which is consistent with each of two "hypotheses proves neither, Prudential Insurance Company v. King, 8 Cir., 101 F.2d 990, decided February 25, 1939; and when all of the substantial evidence is as consistent with innocence as it is with guilt, it is the duty of the appellate court to reverse a conviction, Shama v. United States, 8 Cir., 94 F.2d 1, 4; Fulbright v. United States, 8 Cir., 91 F.2d 210; Planing v. United States, 8 Cir., 21 F.2d 508; Wright v. United States, 8 Cir., 227 F. 855. Nor is there any presumption in the absence of proof that the $5,903 was a part of the money stolen after August 24, 1937, rather than that it was a part of the money stolen before that date. United States F. & G. Co. v. Des Moines Nat. Bank, 8 Cir., 145 F. 273, 279.
The government does not deny that the allegations and the proof upon this point do not correspond, but counsel say the variance is not material. Berger v. United States, 295 U.S. 78, 82, 55 S.Ct 629, 630, 79 L.Ed. 1314, is relied upon. The test of a material variance is there stated to be “(1) that the accused shall be definitely informed as to the charges against him, so that he may be enabled to present his defense and not be taken by surprise by the evidence offered at the trial; and (2) that he may be protected against another prosecution for the same offense.” We are of the opinion that the variance in this instance is material and prejudicial. The indictment informed the defendant that the government would prove that the $5,903 was a part of that stolen after August 24, 1937, and not that it might be a part of that taken sometime during the preceding seven years. The defense, had it been alleged that the $5,903 was a part of the money taken before that date, would be altogether different from the defense if it were alleged that it was taken afterwards. Even though the description were unnecessary in the indictment it devolved upon the government to prove it as laid. Potter v. United States, 155 U.S. 438, 445, 15 S.Ct. 144, 39 L.Ed. 214.
It is insisted further that the indictment charges that the $5,903 found in John’s room after his disappearance on December 28, 1937, constituted evidence admissible against the principal, had he been tried for the felony charged against him, and that it is therefore admissible against the defendant. This theory would regard the allegation that the money was the fruit of the offense as surplusage. It fails also to distinguish between admissibility of evidence against the principal and evidence which constitutes substantial proof of the dependent offense.
This argument is sufficiently plausible and important, however, to make it expedient to examine the question of whether or not, were the record on the trial of the principal the same as the record in this case, the $5,903 found in the iron box would be relevant evidence against him.
The general rule in favor of the admission of such evidence is stated thus in 36 C.J. 894: “When money has been stolen and the evidence against the accused is largely circumstantial, it has been held proper to admit in evidence * * * as showing a possible motive for the crime. * * * The possession by accused of money immediately or shortly after the theft * * * and for stronger reason is such evidence admissible when there is proof both of the impecuniosity of accused before the larceny and the possession by him of considerable money for a person in his circumstances immediately afterward, as such a sudden accession of wealth by defendant, contemporaneous with the larceny of money, tends strongly to connect him with the crime. To contradict this evidence accused may show that he had money just prior to the theft. sf! Jjs C»
In short the evidence of possession of a large sum of money by the defendant immediately after a theft raises a presumption of fact that the money found is a part of the stolen money and that the defendant was connected with the theft. Under this general rule the foundation for the introduction of such evidence includes proof of (1) the “impecuniosity” of the defendant just before the theft, (2) and the “sudden accession” of wealth (3) contemporaneous with the theft. O’Shea v. United States, 6 Cir., 93 F.2d 169; People v. Connolly, 253 N.Y. 330, 171 N.E. 393; Davis v. Commonwealth, 154 Ky. 774, 159 S.W. 607; Perrin v. State, 81 Wis. 135, 50 N.W. 516; 17 R.C.L. p. 68. down by the Supreme ther burden upon the government ing some necessary or natural connection between the sums in defendant’s possession and those he is charged with taking. Williams v. United States, 168 U.S. 382, 396, 397, 18 S.Ct. 92, 97, 42 L.Ed. 509. In the cited case the defendant was convicted under an indictment charging extortion. Evidence was introduced under the general rule stated above showing that during the period of about three months when the extortions were taking place the defendant deposited in the bank $4750 although his salary was only $140 a month. In reversing the judgment of conviction, in connection with the statement of the rule quoted above, the court observed that “no sum so deposited corresponded in amount with the sums which he was charged with having extorted.” This case is criticized by Prof. Wigmore in 1 Evidence § 154, where he states the rule thus: “Another mode, however, of making the fact of money-possession relevant is to show its sudden possession i.e. to show that before the time of taking the person was without money, while immediately after that time he had a great deal; this reduces the hypothesis to such as involve sudden acquisition, and a dishonest acquisition thus becomes a natural and prominent hypothesis. On such conditions the possession of unidentified money becomes relevant.” The rule laid Court adds the fur-of show-
Upon the trial the government introduced facts in evidence in this case which destroy the presumption of fact and render the finding of the $5,903 irrelevant. While it was shown that the principal, John L. Neal, was receiving a salary of only $140 a month it was also shown that during the preceding seven years he had in addition to his salary received approximately $100,000, and that during the 9 months preceding August 24, 1937, his income had been approximately $200 a day. Here was no sudden acquisition of wealth after August 24th. It is true his large income prior to that date was the result of stealing, but such stealing was not a federal crime; and his possession of $5,903 after August 24th, without proof of acquisition after that date, would not raise a presumption that its acquisition was unlawful, or that it was a part of the fruits of his federal offense.
As the record stood at the close of the evidence there was no relevant evidence to support a verdict of guilty on count one of the indictment. The defendant’s motion as to this count should have been sustained.
The second count of the indictment charges an offense under Title 18 U.S.C.A. § 251 (Cr.Code § 146), which provides that: “Whoever, having knowledge of the actual commission of the crime of murder, or other felony cognizable by the courts of the United States, conceals and does not as soon as may be disclose and make known the same to some one of the judges of other persons in civil or military authority under the United States, shall be fined not more than $500, or imprisoned not more than three years, or both.”
The elements of the offense under the statute are two: There must be (1) a concealment of something such as suppression of the evidence or other positive act and (2) a failure to disclose. Proof of one of the elements only, and not of both, is not sufficient to support a conviction. Bratton v. United States, 10 Cir., 73 F.2d 795, 797; United States v. Farrar, D.C.Mass., 38 F.2d 515, 517. The sufficiency of the charge is not assailed, but it is claimed that defendant did not fail to disclose “as soon as may be”; that he did in fact as shown by the government’s evidence disclose all that he knew on the fourth, fifth and sixth of January, 1938. The evidence also shows that he made no disclosures until after he had been frightened into doing so by the federal officers who were investigating the crime. He might have given them such information on the 28th of December, 1937, but instead of doing so he “threw dust in their eyes” when they interviewed him and gave them misleading information. Under the evidence it was a question for the jury to determine whether he made the disclosure “as soon as may be” to satisfy the requirements of the law.
We next consider the charge in the indictment that the defendant did two affirmative acts to “conceal” the crime of the principal. The first act charged was that he concealed $5,903 in a golf bag, “which moneys unlawfully and feloniously had been taken and carried away by the said John L. Neal, with intent to steal the same, from the possession of” the bank; and, second, that he knowingly altered and expunged from the books of account of the Neal Funeral Home entries showing the investment of moneys by John L. Neal, which moneys had unlawfully been taken and carried away from the possession of the bank by John with intent to steal the same.
The first alleged act, that the defendant concealed $5,903 of the money stolen by John L. Neal between August 24 and December 28, 1937, is not, as shown above, supported by the evidence.
Neither is the second alleged affirmative act of the defendant to conceal the crime of John L. Neal supported by substantial evidence. That charge is that the defendant expunged from the books of the funeral home the entries showing John L. Neal’s investment of the stolen moneys in that business. There are only two entries in the books showing investments of John L. Neal in the funeral business after August 24, 1937. One of these shows that on October 15, 1937, he “advanced” $125 and the other that on October 19th he “advanced” the further sum of $100. There is. no evidence whatever connecting these sums with the money unlawfully taken and carried away from the bank; and the amount is not sufficient to raise a presumption of fact that they were not honest savings from- his salary.
The basis in the evidence upon which the charge is founded is that the defendant did on December 29, 1937, instruct the bookkeeper to delete John L. Neal’s name from the entries in the books. His name or his initials appeared in connection with certain entries on about 30 different sheets of the books. The bookkeeper took these sheets home with him and copied them substituting for the name or initials of John L. Neal other explanations such as “administration fees” or “W. Squire Neal.” He returned them to the office of the funeral home on December 31, 1937, and delivered them to Otis Allen. He then took the original sheets home with him without the defendant’s knowledge and made a second copy for himself. The originals were returned to the office on February 17, 1938, and placed in the books, where they remained and were produced at the trial unaltered. The defendant did not direct that the original sheets be destroyed, although the bookkeeper suggested that they be burned. An intent to conceal from the government, i'f such intent existed, that is not carried out is not an offense under the statute.
The government argues that for a few days after December 27, 1937, the defendant aided in concealing John L. Neal, and that he is therefore guilty of misprision of felony. The evidence shows that he did know where John was in hiding and may have advised with him about escaping; but failure to inform the officers is not sufficient alone to constitute a crime under the statute. Bratton v. United States, supra.
The government having failed to produce any competent evidence to sustain one of the essential elements of the offense charged in count two of the indictment the motion for a directed verdict should have been sustained as to that count also.
Because the evidence fails to support the charges in each count of the indictment the 'judgment is reversed and the case remanded with instructions to grant a new trial.
Question: What is the specific issue in the case within the general category of "criminal - federal offense"?
A. murder
B. rape
C. arson
D. aggravated assault
E. robbery
F. burglary
G. auto theft
H. larceny (over $50)
I. other violent crimes
J. narcotics
K. alcohol related crimes, prohibition
L. tax fraud
M. firearm violations
N. morals charges (e.g., gambling, prostitution, obscenity)
O. criminal violations of government regulations of business
P. other white collar crime (involving no force or threat of force; e.g., embezzlement, computer fraud,bribery)
Q. other crimes
R. federal offense, but specific crime not ascertained
Answer:
|
songer_state
|
34
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What follows is an opinion from a United States Court of Appeals. Your task is to identify the state or territory in which the case was first heard. If the case began in the federal district court, consider the state of that district court. If it is a habeas corpus case, consider the state of the state court that first heard the case. If the case originated in a federal administrative agency, answer "not applicable". Answer with the name of the state, or one of the following territories: District of Columbia, Puerto Rico, Virgin Islands, Panama Canal Zone, or "not applicable" or "not determined".
Jackie RIMMER, Appellant, v. The FAYETTEVILLE POLICE DEPT., Appellee.
No. 75-1913.
United States Court of Appeals, Fourth Circuit.
Argued Jan. 13, 1977.
Decided Dec. 20, 1977.
John Boddie, Third Year Law Student (Barry Nakell, University of North Carolina School of Law, Chapel Hill, N. C., on brief), for appellant.
Jacob L. Safron, Sp. Deputy Atty. Gen., Raleigh, N. C. (Rufus L. Edmisten, Atty. Gen. of N. C., Raleigh, N. C., on brief), for appellee.
Before HAYNSWORTH, Chief Judge, FIELD, Senior Circuit Judge, and WYZANSKI , Senior District Judge.
For the District of Massachusetts, Sitting by Designation.
HAYNSWORTH, Chief Judge:
Rimmer filed an action under 42 U.S.C.A. § 1983 seeking damages and injunctive relief for an alleged denial of constitutional rights during the course of a trial on criminal charges in a state court. At the time of filing he had not completed exhaustion of his state court remedies, but he did complete exhaustion of those remedies after the district court dismissed this complaint. The state court judgment of conviction, however, still stands unreversed and unvacated. We conclude that the doctrine of collateral estoppel forecloses assertion of Rimmer’s claims and that the district court properly dismissed the complaint.
Rimmer was involved in collisions with two other automobiles in which personal injuries and property damage were suffered. Rimmer fled the scene. A security guard, employed in a nearby establishment, gave chase, but Rimmer evaded him after striking the guard and cutting him with a knife.
Several days later, Rimmer went to the police station to reclaim his automobile. The security guard was present and identified Rimmer as the fleeing driver he had chased. At the criminal trial on the charges of fleeing the scene of the collision without having given aid to the injured, the security guard identified Rimmer as the fleeing motorist. Rimmer had objected to the testimony of the guard as the product of an impermissibly suggestive confrontation, the meeting in the police station. His objection was overruled, and that action of the trial judge was affirmed by the North Carolina Court of Appeals. The Supreme Court of North Carolina denied certiorari.
On the same day Rimmer filed his petition for a writ of certiorari in the Supreme Court of North Carolina, he filed this action under § 1983 seeking damages and a mandatory injunction to require the defendants to seek habeas corpus relief in Rimmer’s behalf. The sole basis of the claim was that he suffered a federal constitutional deprivation when the state court received the identification testimony of the security guard. Though it is clear that he claimed that the conviction was invalid, he did not seek release on a writ of habeas corpus.
I.
Since it was clear that Rimmer was claiming that his conviction was invalid, the district court might have treated the complaint as one for habeas relief as well as a complaint for damages under § 1983, but it did not. In any event, however, the district court is not to be faulted for what it did. At the time of filing and of the prompt dismissal, Rimmer had not exhausted his state remedies, and, on that account, appears to have studiously avoided requesting habeas relief. Moreover, even if the district court had treated the complaint as implicitly requesting such relief, it would have been subject to dismissal because the state court remedies had not then been exhausted.
II.
When an action under the Civil Rights Act calls into question the validity of the state court conviction, it so closely resembles an action for a federal writ of habeas corpus that a requirement of exhaustion of available state remedies may seem reasonable. Some courts have imposed such a requirement where, as here, the judgment in the civil rights case will necessarily determine the validity or invalidity of the state court conviction.
If there is a requirement of exhaustion of available state remedies in such cases, it runs counter to the general intention of the Congress in 1871 in enacting the Civil Rights Act. That Congress was distrustful of state courts in lending protection to civil rights and wished to provide alternative federal remedies. Preiser v. Rodriguez, 411 U.S. 475, 93 S.Ct. 1827, 36 L.Ed.2d 439 (1973), and Wolff v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974), involving challenges to the conduct of prison officials, suggest there is no requirement of exhaustion of state remedies, even when actions bring into question regulations and practices of substantial interest to the state. One might infer from those decisions a likelihood that the Supreme Court would not burden a civil rights action with a state court remedies exhaustion requirement, even in a case such as this where the validity of the state court conviction is called into question.
On the other hand, a much later congress, when enacting what is now 28 U.S.C.A. § 2254, explicitly imposed an exhaustion of state remedies requirement before federal habeas corpus relief may be sought. If a state prisoner is to languish in prison while exhausting his state judicial remedies before he has access to a federal court for habeas relief, there would seem to be little reason not to put him through the same process when he challenges the validity of his state court conviction though he seeks only a money award rather than a writ of habeas corpus.
We need not answer the question of exhaustion of state remedies, however, for here, even if state remedies had been exhausted at the time of filing, the court would be required to hold, as it did, that the issue was precluded by the standing state court conviction.
III.
As noted above, Rimmer fully litigated the question he now tenders in the course of his criminal trial and subsequent appellate review. He consistently lost under circumstances in which his very freedom turned upon the question of a violation of his constitutional rights.
Over eleven years ago in Moore v. United States, 360 F.2d 353 (4th Cir. 1966), we held that a taxpayer convicted of tax fraud could not relitigate the question of his fraud in a subsequent civil suit for the collection of fraud penalties for the same years which were involved in the criminal prosecution. There is nothing new in the concept that full litigation of an issue in a criminal proceeding forecloses subsequent relitigation of the issue in a civil proceeding when resolution of the issue was essential to the conviction.
With one caveat to be mentioned, the fact that Rimmer’s subsequent civil action was brought under the Civil Rights Act warrants no departure from the general rule. We readily adopt the reasoning of the First Circuit in Mastracchio v. Ricci, 498 F.2d 1257 (1974), and of Judge Tjoflat in Part IV of his opinion dissenting in part in Meadows v. Evans, 550 F.2d 345 (5th Cir. 1977). There is no need here to repeat what has been persuasively said there.
Judge Tjoflat wrote for himself and three others in dissent, while Judge Ainsworth, in a separate opinion, expressed agreement with him. The majority of the judges in the Fifth Circuit, however, did not address the question. It simply summarily affirmed a panel decision holding that exhaustion of state remedies was requisite. There is substantial unanimity among the cases holding the rules of issue preclusion to be applicable in civil rights cases. Indeed, the Supreme Court has implied that the “normal principles of res judicata would apply.”
Nor do we see any practical problem in the application of the rule in this context as long as the state prisoner-plaintiff has, or has had, access to a federal forum for the determination of his federal constitutional claims. Most state court prisoners do have such a right of access through 28 U.S.C.A. § 2254, but there are exceptions. Under Stone v. Powell, 428 U.S. 465, 96 S.Ct. 3037, 49 L.Ed.2d 1067 (1976), state court prisoners complaining of searches and seizures would usually have no such access to a federal forum. Others may be unable to meet the “in custody” requirement of § 2254, and never could have met it. Application of the rule of preclusion by reason of a state court conviction in those cases, therefore, may deny a state court prisoner access to a federal forum entirely. Since it was the general intention of the Civil Rights Act to provide access to a federal forum for the adjudication of federal constitutional rights, the Civil Rights Act itself may present a bar to foreclosure of the issue in those cases. This problem has been noted by others, including Judge Goldberg in his separate opinion in Meadows v. Evans, 550 F.2d 345 (5th Cir. 1977); by Judge Coffin in Mastracchio v. Ricci, 498 F.2d 1257, 1260 n. 2 (1st Cir. 1974); by Judge Merhige in Moran v. Mitchell, 354 F.Supp. 86 (E.D.Va. 1973).
When, after exhaustion of state court remedies, a prisoner succeeds in an action under § 2254, he is the ultimate victor. While the state court judgment is neither reversed nor vacated, the prisoner is released and the state court judgment authoritatively declared void. Thereafter, the state court judgment should have no preclu-sive effect. The problem we foresee exists only in those cases in which there is not and never has been a right of access to a federal forum for adjudication of the federal constitutional question determined in the course of the state court proceedings.
We are not met with the problem in this case, however. As the others who have mentioned it, we are content to notice its presence in some future case and to confine our present holding to those cases in which the state prisoner-plaintiff has or, for a reasonable time, had a right of access to a federal forum for the adjudication of his federal claim.
AFFIRMED.
. We use the term “collateral estoppel” to denote the doctrine described as “issue preclusion” in the Restatement (Second) of Judgments § 68, Comment b (Tent. Draft No. 1, 1973), and thus to also include the less common term of “direct estoppel.”
. State v. Rimmer, 25 N.C.App. 637, 214 S.E.2d 225 (1975).
. State v. Rimmer, 288 N.C. 250, 217 S.E.2d 674 (1975).
. Guerro v. Mulhearn, 498 F.2d 1249 (1st Cir. 1974); Mastracchio v. Ricci, 498 F.2d 1257 (1st Cir. 1974); cert, denied, 420 U.S. 909, 95 S.Ct. 828, 42 L.Ed.2d 838 (1975); Fulford v. Klein, 529 F.2d 377 (5th Cir. 1976), aff’d en banc, 550 F.2d 342 (5th Cir. 1977); Meadows v. Evans, 529 F.2d 385 (5th Cir. 1976), aff'd en banc, 550 F.2d 345 (5th Cir. 1977); Watson v. Briscoe, 554 F.2d 650 (5th Cir. 1977).
. See Mitchum v. Foster, 407 U.S. 225, 242, 92 S.Ct. 2151, 32 L.Ed.2d 705 (1972).
. Wolff v. McDonnell, 418 U.S. 539, 554 n. 12, 94 S.Ct. 2963, 2974, 41 L.Ed.2d 935 (1974).
Question: In what state or territory was the case first heard?
01. not
02. Alabama
03. Alaska
04. Arizona
05. Arkansas
06. California
07. Colorado
08. Connecticut
09. Delaware
10. Florida
11. Georgia
12. Hawaii
13. Idaho
14. Illinois
15. Indiana
16. Iowa
17. Kansas
18. Kentucky
19. Louisiana
20. Maine
21. Maryland
22. Massachussets
23. Michigan
24. Minnesota
25. Mississippi
26. Missouri
27. Montana
28. Nebraska
29. Nevada
30. New
31. New
32. New
33. New
34. North
35. North
36. Ohio
37. Oklahoma
38. Oregon
39. Pennsylvania
40. Rhode
41. South
42. South
43. Tennessee
44. Texas
45. Utah
46. Vermont
47. Virginia
48. Washington
49. West
50. Wisconsin
51. Wyoming
52. Virgin
53. Puerto
54. District
55. Guam
56. not
57. Panama
Answer:
|
sc_decisiontype
|
A
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the type of decision made by the court among the following: Consider "opinion of the court (orally argued)" if the court decided the case by a signed opinion and the case was orally argued. For the 1791-1945 terms, the case need not be orally argued, but a justice must be listed as delivering the opinion of the Court. Consider "per curiam (no oral argument)" if the court decided the case with an opinion but without hearing oral arguments. For the 1791-1945 terms, the Court (or reporter) need not use the term "per curiam" but rather "The Court [said],""By the Court," or "By direction of the Court." Consider "decrees" in the infrequent type of decisions where the justices will typically appoint a special master to take testimony and render a report, the bulk of which generally becomes the Court's decision. This type of decision usually arises under the Court's original jurisdiction and involves state boundary disputes. Consider "equally divided vote" for cases decided by an equally divided vote, for example when a justice fails to participate in a case or when the Court has a vacancy. Consider "per curiam (orally argued)" if no individual justice's name appears as author of the Court's opinion and the case was orally argued. Consider "judgment of the Court (orally argued)" for formally decided cases (decided the case by a signed opinion) where less than a majority of the participating justices agree with the opinion produced by the justice assigned to write the Court's opinion.
HEAD, DOING business as LEA COUNTY PUBLISHING CO., et al. v. NEW MEXICO BOARD OF EXAMINERS IN OPTOMETRY.
No. 392.
Argued April 15-16, 1963.
Decided June 17, 1963.
Carol J. Head argued the cause and filed briefs for appellants.
Earl E. Hartley, Attorney General of New Mexico, and Robert F: Pyatt, Special Assistant Attorney General, argued the cause and filed a brief for appellee.
By special leave of Court, Solicitor General Cox argued the cause for the United States, as amicus curiae, urging reversal as to appellant Permian Basin Radio Corp. With him on the brief were Assistant Attorney General Loevinger, Bruce J. Terris, Lionel Kestenbaum, Max D. Paglin, Daniel R. Ohlbaum and Ruth V. Reel.
Ellis Lyons, Leonard J. Emmerglick, Harold Kohn and William P. MacCracken, Jr. filed a brief for the American Optometric Association, Inc., as amicus curiae, urging affirmance.
Opinion of the Court by
Mr. Justice Stewart,
announced by Mr. Justice White.
This case comes to us on appeal from the Supreme Court of New Mexico. One of the appellants, Agnes K. Head, owns a newspaper in Hobbs, New. Mexico. The other appellant, Permian Basin Radio Corporation, owns and operates a radio station there. Hobbs is in the southeastern corner of the State, close, to the Texas border, and much of the area served by both the radio station and the newspaper lies m Texas; The appellants were enjoined from accepting or publishing .within the State of' New Mexico a Texas optometrist’s advertising found to be in violation of New Mexico law. The appellants claim that the state law, as applied, imposes an unlawful burden on interstate commerce. Permian also argues that regulation of advertising by radio has been preempted by the Communications Act of 1934. We noted probable jurisdiction, 371 U. S. 900, and invited the Solicitor General to express the Government’s views concerning the question of federal preemption. We have concluded that the judgment should be affirmed.
Section 67-7-13 of the New-Mexico Statutes Annotated deals generally with the practice of optometry. It prohibits several varieties of unauthorized practice, and forbids even licensed practitioners from employing certain sales techniques, such as house-to-house canvassing, peddling on streets or highways, or offering lenses and frames as premiums. It also prohibits:
“(m) Advertising by any means whatsoever the quotation of any prices or terms on eyeglasses, spectacles, lenses, frames or mountings, or which quotes discount to be offered on eyeglasses, spectacles, lenses, frames or mountings or which quotes 'moderate prices,’ 'low prices,’ 'lowest prices,’ 'guaranteed glasses,’ 'satisfaction guaranteed,’ or words of similar import.”
The purpose of this provision, according to the Supreme Court of New Mexico, is to “protect . . . citizens against the evils of price-advertising methods tending to satisfy the needs of their pocketbooks rather than the remedial requirements of their eyes.” 70 N. M. 90, 94, 370 P. 2d 811, 813. Similar laws have been enacted in many States to assure high standards of professional competence,
The facts stated in the complaint were not disputed. Appellants received and published advertisements from Abner Roberts, an optometrist who resided and conducted his business in the State of Texas, just a few miles east of Hobbs. In the words of the complaint, this advertising consisted of “the quotation of prices on eyeglasses and spectacles, and of the quotation o'f. discounts to be offered on eyeglasses and' spectacles.” The appellants conceded that the advertising violated § 67-7-13 (m). Finding the statute applicable and violated, the trial court enjoined each of the appellants “from accepting or publishing within the State of New Mexico advertising of any nature from Abner Roberts which quotes prices or terms on eyeglasses ... or which quotes moderate prices, low prices, lowest prices, guaranteed glasses, satisfaction guaranteed, or words of similar import . . . .” The Supreme Court of New Mexico affirmed, ruling that the injunction did not unlawfully burden interstate commerce and that the State’s jurisdiction had not been ousted by federal legislation. 70 N. M. 90, 370 P. 2d 811.
I.
Without doubt, the appellants’ radio station and newspaper are engaged in interstate commerce, and the injunction in this case has unquestionably imposed some restraint upon that commerce. But these facts alone do not add up to an unconstitutional burden on interstate commerce. As we said in Huron Portland Cement Co. v. City of Detroit, 362 U. S. 440, upholding the application of a Detroit smoke abatement ordinance to ships engaged in interstate and international commerce: “In determining whether the state has imposed an undue burden on interstate commerce, it must be borne in mind that the Constitution when ‘conferring upon Congress the regulation of commerce, . . . never intended to cut the States off from legislating on all subjects relating to the health, life, and safety of their citizens, though the legislation might indirectly affect the commerce of the country. Legislation, in a great variety of ways, may affect commerce and persons engaged in it without constituting a regulation of it, within the meaning of the Constitution.’ Sherlock v. Ailing, 93 U. S. 99, 103; Austin v. Tennessee, 179 U. S. 343; Louisville & Nashville R. Co. v. Kentucky, 183 U. S. 503; The Minnesota Rate Cases, 230 U. S. 352; Boston & Maine R. Co. v. Armburg, 285 U. S. 234; Collins v. American Buslines, Inc., 350 U. S. 528.” 362 U. S., 443-444.
Like the smoke abatement ordinance in the Huron-case, the statute here involved is a measure directly addressed to protection of the public health, and the statute thus falls within the most traditional concept of what is compendiously known as the police power. The legitimacy of state legislation in this precise area has been expressly established. Williamson v. Lee Optical Co., 348 U. S. 483. A state law may not be struck down on the mere showing that its administration affects interstate commerce in some way. “State regulation, based on the police power, which does not discriminate against interstate commerce or operate to disrupt its required uniformity, may constitutionally stand.” Huron Portland Cement Co. v. City of Detroit, supra, at 448.
It has not been suggested that, the statute, applicable alike to “any person” within the State of New Mexico, discriminates against interstate commerce as such. Nor can we find that the legislation impinges upon an area of interstate commerce which by its nature requires uniformity of regulation. The appellant's haye pointed to no regulations of other States imposing conflicting duties, nor can we readily imagine any. Colorado Anti-Discrimination Comm’n v. Continental Air Lines, 372 U. S. 714. We hold that the New Mexico statute, as applied here to prevent the publication in New Mexico of the proscribed price advertising, does not impose a constitutionally prohibited burden upon interstate commerce.
II.
In dealing with the contention that New Mexico’s jurisdiction to regulate radio advertising has been preempted by the Federal Communications Act, we may begin by noting that the validity of this claim cannot be judged by reference to broad statements about the “comprehensive” nature of federal regulation under, the Federal Communications Act. “[T]he ‘question whether Congress and its commissions acting under it have so far exercised the exclusive jurisdiction that belongs to it as to exclude the State, must be answered by a judgment upon the particular case.’ Statements concerning the ‘exclusive jurisdiction’ of Congress beg the only controversial question: whether Congress intended to make its jurisdiction exclusive.” California v. Zook, 336 U. S. 725, 731. Kelly v. Washington, 302 U. S. 1, 10-13. In areas of the law not inherently requiring national uniformity, our decisions are clear in requiring that state statutes, otherwise valid, must be upheld unless there is found “such actual conflict between the two schemes of regulation that both cannot stand in the same area, [or] evidence of a congressional design to preempt the field.” Florida Avocado Growers v. Paul, 373 U. S. 132, 141.
The specific provisions of the federal statute chiefly relied upon to support Permian’s claim are those governing the granting, renewal, and revocation of broadcasting licenses. Under the broad standard of “public interest, convenience, and necessity,” the Federal Communications Commission may consider a wide variety of factors in passing upon the fitness of an applicant. It is argued that the content.of advertising is one of the factors which may be considered, and there is evidence that the Commission itself has on occasion so interpreted its authority. Further, the United States argues that the Commission has the authority to promulgate general regulations concerning the subject of advertising for the guidance of broadcasters. See Federal Communications Comm’n v. American Broadcasting Co., 347 U. S. 284, 289-290. . This grant of federal power, it is argued, is sufficient to oust state regulation of radio advertising.
Assuming this to be a correct statement of the Commission’s authority, we are nevertheless not persuaded that the federal legislation in this field has excluded the application of a state law -of the kind here involved. The nature of the regulatory power given to the federal agency convinces us that Congress could not have intended its grant of authority to supplant all the detailed state regulation of professional advertising .practices, particularly when the grant of power to the Commission was accompanied by no substantive standard other than the “public interest, convenience, and necessity.” The Solicitor General has conceded that the power of license revocation is not a plausible, substitute for state law dealing with “traditional” torts or crimes committed through the use of radio. We can find no material difference with respect to the less “traditional” statutory violation here involved. In the absence of positive evidence of legislative intent to the contrary, we cannot believe Congress has ousted the States from an area of such fundamentally local concern.
Finally, there has been no showing of any conflict between this state law and the federal regulatory system, or that the state law stands as an obstacle to the full effectiveness, of the federal statute. No specific federal regulations even remotely in conflict with the New Mexico law have been called to our attention. The Commission itself has apparently viewed state regulation of advertising as complementing its regulatory function, rather than in any way conflicting with it. As in Colorado Anti-Discrimination Comm’n v. Continental Air Lines, Inc., 372 U. S. 714, at 724, we are satisfied that the state statute “at least so long as any power the [Commission] may have remains ‘dormant and unexercised,’ will not frustrate any part of the purpose of the federal legislation.”
Mr. Justice Douglas concurs in the result.
Affirmed.
48 Stat. 1064, as amended, 47 U. S. C. § 151 et seq.
“(i) Either in person or by or through solicitors or agents giving or offering to .give to any person eyeglasses, spectacles or lenses, either with or without frames or mountings, as a premium or inducement for any subscription to any book, set of books, magazines, magazine, periodical or other publication, or as a premium or inducement for the purchase of any goods, wares or merchandise.
. . . . .
“(k) .The making of a house to house canvass either in person or through solicitors or associates for the purpose of selling, advertising or soliciting the sale of eyeglasses, spectacles, lenses, frames, mountings, eye examinations or optometrical services.
“(l) The peddling of eyeglasses, spectacles or lenses from house to house or on the streets or highways, notwithstanding any law for the licensing of peddlers.”
See Ark. Stat. Ann. § 72-815 (1957 Replacement); Cal. Bus. & Professions Code §3129; Del. Code Ann., Tit. 24, §2113; Fla. Stat. Ann. §§463.11, 463.14; Hawaii Rev. Laws § 68-9 (d) (1960 Supp.); Ind. Stat. Ann. §§ 63-1018a (e), 63-1019 (f) (1961); Ky. Rev. Stat. §320.300; La. Rev. Stat. §37:1063; Mich. Stat. Ann. § 14.648 (i) (1961 Supp.); Minn. Stat. Ann. §148.57 (3); Mo. Ann. Stat. §336.110; Mont. Rev. Codes §66-1302 (11); Neb. Rev. Stat. § 71-148; Nev. Rev. Stat. § 636:300 (10); N. J. Stat. Ann. §45:12-11 (h) (1962 Supp.); N. C. Gen. Stat. § 90-124 (9); N. Dak. Cent. Code §43-13-29; Okla. Stat. Ann., Tit. 59, §943; Ore. Rev. Stat. § 683.140 (6); Pa. Stat. Ann., Tit. 63, § 237; R. I. Gen. Laws § 5-35-22; S. C. Code of Laws § 56-1075; S. Dak. Code §27.0707 (6) (1960 Supp.); Tenn. Code Ann. § 63-815; Va. Code §54-388, par. 2 (d).; Wash. Rev. Code Ann. § 18.53.140; W. Va. Code §2937 (1961); Wis. Stat. Ann. § 153.10.
The case is not one, therefore, in which the State seeks to justify a statute as a health measure on the attenuated theory that the economic well-being of a profession or industry will assure better performance in the public interest. See Baldwin v. G. A. F. Seelig, Inc., 294 U. S. 511, 522-523. Compare Semler v. Dental Examiners, 294 U. S. 608.
The appellants have argued that the decree below will have the effect of preventing communication between the Texas optometrist and Texas residents. A similar argument was rejected in Railway Express Agency v. New York, 336 U. S. 106, which held valid a local ordinance prohibiting the display of advertising on trucks which also operated in other States.
E. g., National Broadcasting Co. v. United States, 319 U. S. 190, 213 (“wide licensing and regulatory powers”), id., at 217 (“comprehensive powers to promote and realize the vast potentialities of radio”); Federal Communications Comm’n v. Pottsville Broadcasting Co., 309 U. S. 134, 137 (“unified and comprehensive regulatory system for the industry”).
It is to be noted that this case in no way involves the Commission’s jurisdiction over technical matters such as a frequency allocation, over which federal control is clearly exclusive. 47 U. S. C. § 301.
See Hines v. Davidowitz, 312 U. S. 52.
See 47 U.S. C. §§303 (j), 307 (a), (d), 308 (a), 309 (a), and 312.
We have been cited to specific instances in which the content of advertising analogous to that involved in this case has been considered. See, e. g., Farmers & Bankers Life Ins. Co., 2 F. C. C. 455; WSBC, Inc., 2 F. C. C. 293; Oak Leaves Broadcasting Station, Inc., 2 F. C. C. 298. And see KFKB Broadcasting Assn. v. Federal Radio Comm’n, 60 App. D. C. 79, 47 F. 2d 670.
See Interstate Commerce Comm’n v. Los Angeles, 280 U. S. 52, 68-70. Compare Allen B. Dumont Laboratories v. Carroll, 184 F. 2d 153, which held state censorship of motion pictures shown on television preempted by those provisions of the federal act expressly dealing with “'communications containing profane or obscene words, language, or meaning.” 47 U. S. C. §303 (m)(1)(D).
Our attention has been directed to the following statement of Commission policy:
“In those localities and states where the sale of alcoholic beverages is prohibited by local or state statutes, such advertising by radio in those areas would, of course, not be in the public interest, since adherence to the laws of the state in which a station is located, especially laws expressive of the public policy of the state or locality on subjects relative to health, safety, and morals, is an important aspect of operation in the public interest. Obviously, the same is true with respect to those areas .where advertising of alcoholic beverages is prohibited by law.” F. C. C. Letter to Sen. Edwin C. Johnson, Chairman of the Senate Committee on Interstate and Foreign Commerce, August 11, 1949, 5 Pike & Fischer Radio Reg. 593-594.
The appellants urge three additional grounds for reversal. Each may be disposed of briefly., First, both appellants urge that the state statute deprives them of property, in violation of the Due Process Clause. That claim is foreclosed by Williamson v. Lee Optical Co., 348 U. S. 483. See also Ferguson v. Skrupa, 372 U. S. 726. The appellant Head claims that denial of her right to do business with Abner Roberts is a violation of her. privileges and immunities of national citizenship. But the Privileges and Immunities Clause of the Fourteenth Amendment does not create a naked right to conduct a business free of otherwise valid state regulation. ' Madden v. Kentucky, 309 U. S. 83,. 92-93. Finally,'it is contended that the injunction constitutes an invalid restraint upon freedom of speech protected by the Fourteenth Amendment. This argument was not made to the state courts, nor was it reserved in the notice of appeal to this Court. Under Rule 10, par. 2, of the Rules of this Court, “Only the questions set forth in the notice of appeal or fairly comprised therein will be considered by the court.” See also Rule 15, par. 1 (e)(1).
Question: What type of decision did the court make?
A. opinion of the court (orally argued)
B. per curiam (no oral argument)
C. decrees
D. equally divided vote
E. per curiam (orally argued)
F. judgment of the Court (orally argued)
G. seriatim
Answer:
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songer_usc1
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15
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited title of the U.S. Code in the headnotes to this case. Answer "0" if no U.S. Code titles are cited. If one or more provisions are cited, code the number of the most frequently cited title.
TECHNICAL TAPE CORPORATION, Plaintiff-Appellant, v. MINNESOTA MINING & MANUFACTURING COMPANY, Defendant-Appellee.
No. 337, Docket 24207.
United States Court of Appeals Second Circuit.
Argued April 12,1957.
Decided Aug. 2, 1957.
Mandate Recalled Nov. 8, 1957.
See 249 F.2d 1.
Daniel L. Morris, Curtis, Morris & Safford, New York City (Simon H. Rifkind, Samuel J. Silverman, Edward N. Costikyan, Emanuel E. Sternfield, Robert D. Spille and John A. Mitchell, New York City, of counsel), for plaintiff-appellant.
H. H. Hamilton, New York City (Harold J. Kinney and Robert I. Coulter, St. Paul, Minn., M. K. Hobbs, Platteville, Wis., and Edward A. Haight and J. W. Hofeldt, Chicago, 111., of counsel), for appellee.
Before MEDINA and WATERMAN, Circuit Judges, and LEIBELL, District Judge.
LEIBELL, District Judge.
Plaintiff instituted this action on November 17, 1951, under the Declaratory Judgment Act (28 U.S.C. § 2201) to have the defendant’s patent No. 2,177,627, issued to Richard Drew October 31, 1939 declared invalid, or, if valid, then not infringed. On a motion in the District Court the complaint was dismissed on the grounds that no justiciable controversy was stated upon which a claim for relief could be founded and that the court lacked jurisdiction. On appeal, this court (200 F.2d 876) reversed and held that an amendment to the complaint in the interest of clarity, should be allowed. Then followed various procedural steps, resulting in an amended complaint, a supplemental complaint, the defendant’s answer and plaintiff’s reply. In its answer Minnesota set up a counterclaim for an injunction against further infringement of its patent by plaintiff, and for damages. Plaintiff’s reply charged a misuse by defendant of its patent, in that defendant allegedly attempted to extend its patent monopoly to cover unpatented products, that defendant illegally restrained competition, and for those reasons a court of equity should not grant defendant any relief on its counterclaim.
The trial of this case before Judge Bicks took five weeks. On July 18, 1956, he filed his opinion (143 F.Supp. 429) and on July 26th signed a judgment. The judgment declared that (a) all of the sixteen claims of the Drew patent are valid “except claim 9 as to which no adjudication of validity is made, no infringement of said claim having been found”; that (b) the plaintiff had infringed all the claims of the patent (except claim 9); that (c) defendant had not been guilty of inequitable conduct and was not barred from enforcing the patent; that (d) an injunction should issue enjoining and restraining the plaintiff from making or selling any transparent or colored non-fibrous, film-backed pressure-sentitive tape or sheeting embodying the invention of Letters Patent No. 2,177,627; that (e) defendant recover of the plaintiff the damages which defendant had sustained by reason of the aforesaid infringement; and that (f) plaintiff’s complaint, amended complaint and supplemental complaint be dismissed with costs.
The patent expired October 31, 1956. Plaintiff-appellant has filed a substantial bond for any damages ultimately awarded.
On this appeal Technical Tape contends (1) that there was no “invention” in what Drew did (Drew II patent, No. 2.177.627) ; (2) that there was no novelty in what Drew did because other patents anticipated Drew; (3) that plaintiff, Technical Tape, did not infringe the Drew II patent; (4) that Minnesota has abused whatever patent rights it may have had and is entitled to no relief.
Every judge before whom the validity of the Drew II patent (No. 2,-177.627) was litigated in the District Court (Judges Barnes and Campbell in the Northern District of Illinois and Judge Bicks in the Southern District of New York) has held the Drew II patent valid. Judge Sparks and Judge Min-ton of the United States Court of Appeals (7th Cir.) and Judge Baltzell, a District Judge who sat with them and heard the appeals from the judgments entered on the decisions of Judge Barnes upheld the validity of the Drew II patent (159 F.2d 554). We have considered the evidence in this case on the issue of validity and we are convinced that Judge Bicks’ finding of invention and validity should be sustained.
Judge Barnes in Minnesota Mining & Mfg. Co. v. Pax Plastics Corp., D.C., 65 F.Supp. 303, 306, summarizes the salient features of the Drew II patent, as follows:
“The claims in suit are drawn to a new kind of adhesive sheet or tape having a field of utility not possessed by any prior adhesive tape of any kind. Whether transparent or colored, and whether involving a primer or not, this tape is stably and agressively tacky and seals instantly on contact with almost any surface,, without moistening or heating. The backing is a thin transparent film having smooth, glassy surfaces, such as cellophane. Both the colored and transparent types have been widely used for sealing packages. The colored type provides an attractive ■decorative seal for packages and has also been widely used as a coding tape for wires and tubes. The adhesive contains coloring material visible through the transparent film backing and produces the optical illusion that the backing film is colored, thus causing the back surface of the tape to have a lustrous colored appearance. The backing film protects the colored stratum from becoming smeared or dirty in use of the tape, and provides a back surface to which dirt does not readily cling. The transparent type of tape provides an ‘invisible’ sealing, mending and holding tape widely used for sealing packages, mending books, records, maps and charts, and fastening posters on windows and bulletin boards. Both types of tape have many other uses.”
The patent in suit is not invalid on the grounds that it is an aggregation of components that were old. Plaintiff contends that cellophane sheets were old and so was the use of rubber, resin, and rubber-resin adhesive; and that plaintiff’s patent is simply an aggregation of the two. Plaintiff’s premise does not fully state the facts and its conclusion is not correct. Defendant’s aggregation of old elements produced a “new quality” and “function,” and a new article. It contributed something not had before. It added “to the sum of useful knowledge.” It required “more than ordinary mechanical skill” to produce it. Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, at pages 151 and 152, 71 S.Ct. 127, at page 130, 95 L.Ed. 162. A novel combination of old elements which cooperate with each other so as to produce a new and useful result is patentable. Weller Mfg. Co. v. Wen Products, Inc., 7 Cir., 231 F.2d 795, 798; Brown v. Brock, 4 Cir., 240 F.2d 723, 726; Zonolite Co. v. United States, Ct.Cl., 149 F.Supp. 953, 955.
It is defendant’s contention that Drew was the first to produce film backed, normally tacky, pressure-sensitive and water-insoluble adhesive sheets and tape, all of which is clearly and fairly defined in the specifications and claims of the Drew II patent.
The specifications of the Drew II patent use the words “adhesive sheets or tapes” in the first paragraph and many times thereafter, although the claims refer to adhesive sheets. The adhesive sheets of the Drew patent claims could be of any width, such as tape size material.
That Drew’s patent involved invention is established in several ways. It had been sought by expert chemists of the DuPont Co. and of Johnson & Johnson, for a number of years, unsuccessfully. Expanded Metal Co. v. Bradford, 214 U.S. 366, 381, 29 S.Ct. 652, 53 L.Ed. 1034; Loom Co. v. Higgins, 105 U.S. 580, 591, 26 L.Ed. 1177. In his own experiments Drew stumbled upon it. Of course, after Drew’s discovery it all seemed simple. With Drew’s patent to point the way, infringing competitors would claim that it was so obvious that there really was nothing to it; that it did not require anything but mechanical skill and the use of known materials. But the demand had long existed; skilled men had sought to meet the demand without success. Inland Mfg. Co. v. American Wood Rim Co., 6 Cir., 14 F.2d 657, 659. In the recent case of Rohm & Haas Co. v. Roberts Chemicals, Inc., 245 F.2d 562 the Court of Appeals for the Fourth Circuit in reversing a District Judge’s holding, 142 F.Supp. 499, that the patent in suit before him was invalid for anticipation, stated:
“Since Hester tried and succeeded where Tisdale and the duPont Company tried and failed, we may fairly conclude that the discovery was not obvious to persons skilled in the art.”
The phenomenal success of the Scotch tape produced by the defendant under Drew’s patent is not to be overlooked in considering the question of invention. The Seventh Circuit called it “quite astonishing.” Drew had hit upon something that was useful in many industries in packaging and sealing their products. Although commercial success is not decisive on the issue of invention it is a factor that should not be ignored. Wahl Clipper Corp. v. Andis Clipper Co., 7 Cir., 66 F.2d 162, 165.
In considering the issue of invention and “how far beyond commonplace contriving was the foresight necessary to think out the combination,” the courts find it enlightening to resort to “the history of what went before, the duration of the period during which the invention was needed but failed to appear and its acceptance when it did.” L. Hand, J., in Landis Mach. Co. v. Parker-Kalon Corp., 2 Cir., 190 F.2d 543, 546. “Substantially all inventions are for the combination of old elements; what counts is the selection, out of all their possible permutations, of that new combination which will be servicable.” Safety Car Heating & Lighting Co. v. General Electric Co., 2 Cir., 155 F.2d 937, 939.
The prior art on which plaintiff-appellant relies on this appeal as anticipating Drew II patent will now be discussed.
Plaintiff points to the Brandenberger French patent (No. 433,999, 1912,) as an example of the prior art that anticipated Drew. Brandenberger’s French patent stated: “The (cellulose) sheets can be bonded by means of any adhesive substance, but, in order to increase their electrical resistance, they can be coated first with linseed oil, a solution of rubber or any insulating varnish. These coatings or varnishes can themselves serve as adhesives.” Brandenberger, while a technical adviser of DuPont, never suggested that his French patent of 1912 would give DuPont the answer to its problem of getting a proper sealing medium for its cellophane. If any of his patents had anticipated Drew, and if Drew merely made such advances over Brandenberger as anyone skilled in the art could have made, it is surprising that Brandenberger did not accomplish this himself. No one was in a better position to do so with his years of experience and all the research resources of DuPont within his reach.
The Kronstein patent (No. 1,944,562) was not mentioned in the opinion of the Seventh Circuit (159 F.2d 554), but it was later considered by Judge Campbell in the Neisner Bros. Inc. case (Minnesota Mining & Mfg. Co. v. Neisner Bros., D.C., 122 F.Supp. 752, 754). He noted the similarity between the Brandenberger French patent No. 433,999 and the Kronstein patent and found that it did not anticipate Drew II. The Brandenberger French patent was intended to increase the insulation feature of cellulose sheets when bonded together by an adhesive substance, which also filled the pores of the sheets. That Kronstein’s ideas were quite similar to Brandenberger’s is not disputed. Both dealt with the use of cellophane as an electrical insulation with an adhesive coating. Judge Campbell pointed out that the “problems which confronted Kronstein and Brandenberger were not the same as those which confronted Drew, and their inventions were designed for correspondingly different uses.”
In the case at bar, the trial judge considered the Kronstein patent and quoted in a footnote to his opinion the finding of Judge Barnes in the Pax case (65 F. Supp. 303) as to the Kronstein patent for an electrical insulating band or ribbon. Neither the French Brandenberger patent nor the Kronstein patent anticipated the Drew II patent.
Plaintiff-appellant argues that the Hodgson patent No. 1,467,108 disclosed the subject matter of the Drew II patent and observes that it is not discussed in the opinion of the District Court in this case. But the District Judge stated in his opinion that he had examined the patents referred to as prior art and compared each with the patent in suit and that the Drew patent is sufficiently distinguished from them.
The Hodgson patent is for a “dental film mount” and was issued September 4, 1923. It states that “This invention relates to mounts for photographic films and particularly to mounts adapted to hold small dental Rontgenographic negatives so that they may be examined by transmitted light, and so that they may be readily filed.” The mount has a window and the film, which is larger than the window opening, is attached to the back of the mount by an adhesive substance. The adhesive is referred to as a “slow-drying adhesive, the desired characteristic being that the adhesive shall remain ‘tacky’ for a very considerable length of time.” The Hodgson patent also states that “While the particular composition of the adhesive is not of importance, it is preferably a composition of rubber and coal tar pitch with any suitable softener such as benzol, gasoline or chloroform.”
The patent describes and shows the mount as consisting of two parts. The face sheet is an opaque fabric with an opening in it. The rear sheet is of opaque paper, with an opening in it slightly larger than the face sheet, so that a small margin of the face sheet is exposed all around the rear sheet, when covered by the face sheet. An adhesive is applied to all of the back of the face sheet and when the rear sheet is applied to the face sheet, it will stick to it and at the same time leave a small margin of the rear of the face sheet, with the adhesive thereon, exposed around the opening. The negative may be pressed down from the rear around the aperture against the exposed small margin of the front sheet with the adhesive thereon, and is thus held in place — “but should it be desirable for any reason to remove the negative this can be done since it can be stripped from the adhesive without injury to its diagnostic value.” That is so because the picture on the film is so centered that it does not reach to the outer parts of the film which were applied to the exposed adhesive part of the mount. What happens to the adhesive when the film is removed? Does some of it detach itself from the paper mount and adhere to the film? Does all the adhesive remain on the paper mount? Does all of it attach itself to the film? The patent is silent as to that. And Mr. Shalita, in explaining the Hodgson patent for the plaintiff, admitted that it did not say that the adhesive was non-offsetting or transparent.
The Hodgson patent in no way anticipated the Drew II patent. It does not teach what the Drew II patent taught, nor does it claim anything like what is claimed in the Drew II patent. A comparison of the claims of the two patents proves that absolutely.
Plaintiff complains that defendant’s main answer to the Hodgson patent is to scoff at it. The fact is that in all the cases in the District Courts in which Hodgson has been cited as anticipating Drew II, it has been ignored by the courts, as not worthy of any discussion. The Seventh Circuit found no merit in the contention that Hodgson’s patent anticipated the Drew II patent. And as defendant’s counsel herein remarks “there is no evidence that anyone was ever inspired by it to conceive of Drew’s entirely different product.” We agree with the conclusion of the Seventh Circuit that the Hodgson patent did not in any way anticipate the disclosures of the claims in suit.
A basic difference between the Drew I patent (No. 1,760,820) and the Drew II patent (No. 2,177,627) is that the former applied an adhesive to a porous backing such as “paper or similar fabric material,” while the latter applied an adhesive to a non-fibrous film backing. Drew I also refers to a “unified cellulosic backing” which is defined as meaning “to include a web of fabric comprising paper chosen from the materials herein described including gelatinized eellulosic sheets such as parchmentized paper” and various other types of paper, treated with various compositions. Parchmentized paper is not transparent; and it is not non-fibrous or non-porous. No one of the six claims of the Drew I patent mentions a “film backing.” In Drew II the term “film backing” is used in all the claims except 9 and 10. Claim 9 uses the expression “regenerated cellulose film,” and Claim 10 a “non-fibrous film.”
That plaintiff infringed the Drew II patent is clear from the supplemental complaint [paragraph 8(c)] and the Agreed Statement (Ex. B) [paragraphs 5(a), (b), (c) and 9]. The use of a primer is included in Claims 10, 11 and 16 of the Drew II patent. But the use of a primer is not essential to producing a satisfactory tape under the other claims of the patent (except Claim 9, not relied on by defendant).
The exception mentioned in paragraph 9 of the Agreed Statement limited that admission to the use by plaintiff, in one of its tapes, of an adhesive coating “prepared from polyvinyl ether rather than rubber and resin.” The latter is a second type of accused tape, which used an adhesive very similar to that which Judge Campbell had before him in the Neiser case (101 F.Supp. 926, and 122 F.Supp. 752, 754). Even if the equivalent plaintiff used was unknown at the time of Drew’s invention, it was none the less an equivalent and infringed — Finkelstein v. S. H. Kress & Co., 2 Cir., 113 F.2d 431, 433. The substitute functions in the same way as the original and produces the same result.
Judge Barnes had decided the suits of Minnesota against Freydberg and against Bulkley in Minnesota’s favor on March 30, 1946, D.C., 65 F.Supp. 303, affirmed 7 Cir., 159 F.2d 554 on January 9, 1947. The tape they sold as Illinois distributors of Cofax was made by Cofax, a New York corporation. The plaintiff, Technical Tape Corporation, a Delaware corporation, was organized in 1947, with a place of business in New York City. In August or September 1947 plaintiff hired Shalita, who had worked for Cofax from 1942 to early 1946 and then for another concern. Shalita became a director and Vice-President of plaintiff. Mr. Cohen, the President of Technical, testified that plaintiff leased a factory in October 1947 and began production in the late Spring of 1948. At first plaintiff produced paper backed and cloth tapes, like the masking tape'of the Drew I patent, which had expired on May 27, 1947. Later it also manufactured cellophane backed tapes and tapes having backings with non-fibrous surfaces. According to the supplemental complaint, at least as early as 1950, plaintiff was preparing to manufacture film backed pressure-sensitive adhesive tape and had requested in writing a license from defendant which was refused in September and October 1950. It also appears that as early as October 1950 plaintiff had had a Canadian affiliate manufacturing the said tape upon instruction of plaintiff and that plaintiff had imported the tape from Canada. Also, according to the supplemental complaint plaintiff, itself, has manufactured cellophane backed pressure-sensitive adhesive tape of the kind defendant charged was being manufactured and sold by plaintiff in infringement of Drew II patent, No. 2,177,267, since as early as about May 1951 and had sold such tape in the United States since prior to November 17, 1951.
Plaintiff’s infringement of defendant’s patent was deliberate. When he was seeking a license from Minnesota the plaintiff’s president declared he would make a pressure-sensitive adhesive tape whether or not he got the license. He read the Drew II patent a hundred times. He persuaded Beyer, an employee of Minnesota’s, a quality control man who had access to and understood Minnesota’s ‘standard books’ which were in code, to enter plaintiff’s employ in May 1951 and to head plaintiff’s quality control department; and he advised Beyer to keep from his employer (Minnesota) the fact that he was to enter plaintiff’s employ. He hired an expert, Shalita, who had made an infringing tape for Cofax Corporation. That was the tape involved in Minnesota’s suit against Freydberg, and its suit against Bulkley, heard by Judge Barnes who held that the Cofax tape infringed Minnesota’s tape. The judgments were affirmed in 159 F.2d 554. Shalita had made tapes from the Drew patent examples. With that group around him, the president of the plaintiff-appellant herein, finally made a tape which was so similar to Minnesota’s in every respect that at the trial even he could not tell the one from the other, without an identifying name on the core. The Technical Tape Corporation was a willful infringer. Colgate-Palmolive Co. v. Carter Products, 4 Cir., 230 F.2d 855.
Defendant’s Alleged “Misuse” of the Drew II Patent
As a special defense to defendant’s counterclaim for patent infringement, plaintiff charges that the defendant has “misused” the Drew II patent (No. 2,-177,627), and does not come into court with clean hands; and therefore asks that defendant be denied any relief on its counterclaim. Plaintiff contends that 3M abused its patent monopoly on transparent adhesive tape (Drew II patent) in two ways: (1) by selling its transparent adhesive tape on the condition that the purchaser thereof buy other 3M tape not covered by the patent in suit (citing Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 315 U.S. 788, 62 S.Ct. 402, 86 L.Ed. 363); and (2) by selling its patented transparent adhesive tape on the condition that the purchaser thereof refrain from buying other adhesive tape products, not covered by the patent in suit, from any other manufacturer (citing F. C. Russell Company v. Consumers Insulation Company, 3 Cir., 226 F.2d 373).
To support the charge of “misuse” plaintiff took the depositions of six distributors, and at the trial produced oral testimony of a seventh distributor, and his wife.
The seven distributors are:' Lloyd’s Office Supply of Pawtucket, Rhode Island (an Industrial Tape Division account); Edwards Paper Company of Roxbury, Massachusetts (an Industrial Tape Division account); Southern Stamp and Stationery Company of Richmond, Virginia (an Industrial Tape Division account); Cammaek Office Supply of Burlington, North Carolina (a Wholesale-Retail Tape Division account); Anchor Office Supply Company of Cleveland, Ohio (a Wholesale-Retail Tape Division account) ; Crown Office Supply Company of Chicago, Illinois (a Wholesale-Retail Tape Division account); and Aviation Service Supply Company of Denver, Colorado (an Automotive Tape Division account). Plaintiff also examined before trial A1 Drew, defendant’s New England District Sales Director of its Industrial Sales Division. Both sides read parts of Drew’s deposition into the record of the trial. All the depositions were received as exhibits.
The defendant rebutted the charge of misuse, by the cross-examination of the distributors whose depositions were taken, by the cross-examination of the Arnolds, by using parts of the deposition of A1 Drew, by testimony of Charles C. Smith, General Manager of the defendant’s Cellophane Tape Division for the Wholesale-Retail trade, and by testimony of John J. Bennison, the Eastern Regional Sales Manager for the Industrial Trade Division of defendant.
Concerning the seven distributors, the trial judge stated in his opinion: “The situation with respect to each of these seven distributors has been considered and the Court is satisfied that the conduct of 3M (the defendant) in each instance was motivated solely by honest business considerations in no wise related to an attempt to extend the monopoly of the Drew Patent.”
A jobber who resorted to the disparagement of defendant’s products in order to substitute other and cheaper brands of tape, including infringing brands of tape, where the customer wanted defendant’s tapes; a jobber who did not deal fairly with defendant’s products in displaying and selling them; a jobber who was more interested in pushing the sales of competitors’ products to the detriment of defendant’s products; a jobber with only a few customers, who made no effort to sell defendant’s products ; a jobber who faked so called “drop shipment” orders to mislead the defendant and thus gain a larger discount; a jobber who was habitually delinquent in paying his bills — jobbers who did any of those things were not desirable distributors of defendant’s products and defendant was not required to continue them as distributors.
A “drop shipment” order called for direct shipment of 3M’s products to the jobber’s customer. The jobber would receive a trade discount on such orders, because as a rule they were large and saved 3M warehousing expense. Some jobbers submitted fictitious orders and thereafter picked up the goods themselves to be utilized as stock inventory, thereby receiving a trade discount which was not given on purchases by jobbers for their own stock inventory.
The so-called “select distributorship policy” concerning which A1 Drew was exammed, was developed by the Industrial Tape Division about mid-summer of 1953. It did not apply to any other tape division of the 3M organization. Two of the five distributors (Aviation and Crown), alleged to have been cut off because of their refusal to agree to the select distributorship policy, were not industrial jobbers within the jurisdiction of 3M’s Industrial Tape Division.
As to the three remaining, Southern was cut off from 3M’s tape products in December of 1953 for reasons stated herein in footnote 7. There is nothing in the testimony to support plaintiff’s contention that Southern was cut off because it refused to accept the so-called “select distributorship policy.” Likewise there was no connection between Edwards being cut off as a 3M distributor and the select distributorship policy of the 3M Industrial Tape Division. Edwards was cut off for other reasons, as indicated in footnote 7, some four or five months prior to the time the “select distributorship policy” was proposed by 3M’s Industrial Tape Division.
The testimony of Arnold and his wife (Lloyd’s Office Supply Co.) that in September of 1953 he was informed that 3M had a new company policy and that under such policy Lloyd, if it wished to continue selling 3M tape would have to agree to shop selling Technical Tape, and that when he refused he was cut off, was inconsistent with the testimony of A1 Drew, who denied that any proposal of select distributorship was made to Lloyd’s Office Supply Company, and was inconsistent with the testimony of Bennison and Smith, witnesses at the trial, who testified that 3M does not have a sales policy requiring a jobber or distributor to sell only 3M tape and to refrain from selling other competitive brands. Apparently the trial judge accepted the testimony of Messrs. Bennison and Smith, which he had a right to dp. He saw and heard the witnesses in question.
As stated in International Bureau v. Bethlehem Steel Co., 2 Cir., 192 F.2d 304, 306:
“It is a familiar principle that on appeal in cases tried by the court without a jury findings of fact will be given effect unless shown to be clearly erroneous. [Citing cases.] And, indeed, that principle, together with the correlative one that due regard be given to the opportunity of a trial judge in a non-jury case to determine the credibility of witnesses who appear and testify before him, is firmly embodied in Rule 52(a) F.R.C.P., 28 U.S.C.A.”
The trial judge did not specifically discuss A1 Drew’s testimony in his opinion, but he did state (as a finding of fact based on the evidence) that defendant distributes its products through upwards of 30,000 outlets, including 6,000 paper wholesalers and 4,000 commercial stationers; that many thousands of defendant’s distributors and jobbers handle competitive tapes and that “3M” (Minnesota) has never required either that they handle its tapes exclusively; or that as a condition of buying one type of 3M tape, that they should also buy another.
The trial record on the issue of the so-called “select distributorship policy” proposal, shows that the proposal was made only to certain jobbers or distributors, who were thought to be qualified and not to all the jobbers served by 3M’s Industrial Tape Division; that the proposal was not made on any either-or basis, i. e. that if rejected the distributor would be cut off from 3M products; that the acceptance was purely voluntary on the part of the jobber; that the proposal was rejected by some distributors; that those who rejected the proposal were not cut off from 3M products; and that those who accepted the proposals received increased technical service and assistance while those who rejected the proposals, together with other jobbers or distributors who did not qualify, continued to receive 3M products and the technical service and assistance theretofore given them. This fact situation in the case at bar is in no way comparable to that before the Third Circuit in F. C. Russell Company v. Consumers Insulating Company, supra.
The trial judge also found that a large percentage of distributors identified by the President of Technical Tape as 3M distributors in the New York area are, according to his testimony, also distributors of Technical Tape’s products; and that many Technical Tape jobbers or distributors also handle 3M products.
The trial court’s opinion refers to the practices condemned by the doctrine of the Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 315 U.S. 788, 62 S.Ct. 402, 86 L.Ed. 363 (which declared that a court of equity will not lend its aid to protect a patent monopoly when the patentee is using the patent as an effective means of restraining competition with the sale of its unpatented articles) the trial court stated: “There has been a complete failure of proof that the sales policy of 3M falls within the interdicted conduct.” And there is no proof that defendant violated Section 3 of the Clayton Act (15 U.S.C.A. § 14) . In fact the proof is to the contrary. The defense of “misuse” by defendant of its Drew II patent, appears to be something that plaintiff sought in vain to construct, in order to escape the consequences of its own deliberate and profitable infringement.
A manufacturer has the right to stop dealing with a distributor or jobber who is acting unfairly towards his product or is trying to undermine his trade. That seems to be a proper corollary of Eastern States Retail Lumber Dealers’ Ass’n v. United States, 234 U.S. 600, at page 614, 34 S.Ct. 951, at page 955, 58 L.Ed. 1490, where it was held that:
“A retail dealer has the unquestioned right to stop dealing with a wholesaler for reasons sufficient to himself, and may do so because he thinks such' dealer is acting unfairly in trying to undermine his trade.”
Ordinarily a manufacturer may refuse to deal with a distributor or jobber for reasons sufficient to himself. United States v. Colgate & Co., 250 U.S. 300, 307, 39 S.Ct. 465, 63 L.Ed. 992; United States v. Schrader’s Son, Inc., 252 U.S. 85, 97, 40 S.Ct. 251, 64 L.Ed. 471; and Brosious v. Pepsi-Cola Co., 3 Cir., 155 F.2d 99, 101-102. Of course, this right of a manufacturer must be exercised in good faith, and within the restrictions of the Clayton Act, and may not be exercised in such a manner so as to “substantially lessen competition” or “tend to create a monopoly” in any line of commerce.
The record in the case does not establish that 3M’s refusal to sell to five of the abovenamed distributors was done in bad faith, and had as its purpose to substantially lessen competition, or had a tendency to create a monopoly. Further, the Clayton Act was not intended to reach every remote lessening of competition. Standard Fashion Co. v. Magrane-Houston Co., 258 U.S. 346, 356-357, 42 S.Ct. 360, 66 L.Ed. 653.
There has been no showing here that “competition has been foreclosed in a substantial share of the line of commerce affected,” by the so-called select distributorship policy. Standard Oil Co. of Cal. and Standard Stations v. United States, 337 U.S. 293, 69 S.Ct. 1051, 1062, 93 L.Ed. 1371; Dictograph Products v. Federal Trade Commission, 2 Cir., 217 F.2d 821, 825. This is not a case where the manufacturer imposed a uniform exclusive dealing contract on its jobbers and distributors, such as was the situation in the Dictograph and Russell cases, hereinbefore cited, on which plaintiff relies.
The judgment of the District Court is in all respects affirmed.
. The opening paragraph of Drew’s patent No. 2,177,627 states:
“This invention relates to adhesive sheets having a backing with a non-fibrous surface (such as normal or waterproofed films of regenerated cellulose) and a coating of normally tacky and pressure-sensitive adhesive united thereto. While not limited thereto, the invention relates especially to transparent adhesive sheets, to adhesive sheets in the form of adhesive tapes which may be sold in stacked or coiled form, and to adhesive sheets or tapes which are well adapted to the sealing or securing of wrappers composed of non-fibrous lustrous cellulosic films and the like.”
The adhesive tape made by defendant under the Drew patent is familiarly known as “Scotch” cellophane tape.
. The Drew II patent (No. 2,177,627) after briefly describing the invention in its opening paragraph (footnote 1), mentions the packaging problems which it would help solve. Those problems arose from the use of “packaging and wrapping sheets composed of thin, transparent and flexible non-fibrous films” and the need for sealing or fastening the sheets with proper adhesives, a need which the old conventional adhesives could not meet because of “the nonporous or highly glazed surfaces provided by this type of sheet material” which is transparent and waterproof.
The patent then goes on to describe how, under Drew’s
Question: What is the most frequently cited title of the U.S. Code in the headnotes to this case? Answer with a number.
Answer:
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sc_partywinning
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A
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify whether the petitioning party (i.e., the plaintiff or the appellant) emerged victorious. The victory the Supreme Court provided the petitioning party may not have been total and complete (e.g., by vacating and remanding the matter rather than an unequivocal reversal), but the disposition is nonetheless a favorable one. Consider that the petitioning party lost if the Supreme Court affirmed or dismissed the case, or denied the petition. Consider that the petitioning party won in part or in full if the Supreme Court reversed, reversed and remanded, vacated and remanded, affirmed and reversed in part, affirmed and reversed in part and remanded, or vacated the case.
TCHEREPNIN et al. v. KNIGHT et al.
No. 104.
Argued November 13, 1967.
Decided December 18, 1967.
Arnold I. Shure argued the cause for petitioners. With him on the briefs were Anthony Bradley Eben, Solomon Jesmer and Robert A. Sprecher.
Stuart D. Perlman, Assistant Attorney General of Illinois, argued the cause for respondents Knight et al. With him on the brief were William G. Clark, Attorney General, Richard E. Friedman, First Assistant Attorney General, and John J. O’Toole, Assistant Attorney General. 'Charles J. O’Laughlin argued the cause for respondents City Savings Association et al. With him on the brief was Albert E. Jenner, Jr. Kinsey T. James filed a memorandum for respondent Mensik.
Philip A. Loomis, Jr., argued the cause for the Securities and Exchange Commission, as amicus curiae, urging reversal. With him on the briefs were Solicitor General Griswold, Ralph S. Spritzer, David Ferber and Richard E. Nathan.
Opinion of the Court by
Mr. Chief Justice Warren,
announced by Mr. Justice Brennan.
The narrow question for decision in this case is whether a withdrawable capital share in an Illinois savings and loan association is a “security” within the meaning of the Securities Exchange Act of 1934, 48 Stat. 881, 15 U. S. C. § 78a et seq.
The petitioners are a number of individuals holding withdrawable capital shares in City Savings Association of Chicago, a corporation doing business under the Illinois Savings and Loan Act. On July 24, 1964, they filed a class action in the United States District Court for the Northern District of Illinois, alleging that the sales of the shares to them by City Savings were void under § 29 (b) of the Securities Exchange Act of 1934, 15 U. S. C. § 78ec (b), and asking that the sales be rescinded. Named as defendants in the complaint were City Savings, its officers and directors, two state officials who had taken custody of the Association, and three individuals named as liquidators by the Association’s shareholders in voting a voluntary plan of liquidation. The complaint alleged that the withdrawable capital shares purchased by the petitioners were securities within the meaning of §3 (a) (10) of the Securities Exchange Act, that the petitioners had purchased such securities in reliance upon printed solicitations received from City Savings through the mails, and that such solicitations contained false and misleading statements in violation of § 10 (b) of the Securities Exchange Act and of Rule 10b-5 adopted thereunder by the Securities and Exchange Commission. More specifically, the complaint alleged that the mailed solicitations portrayed City Savings as a financially strong institution and its shares as desirable investments. But the solicitations failed to disclose, inter alia, that the Association was controlled by an individual who had been convicted of mail fraud involving savings and loan associations, that the Association had been denied federal insurance of its accounts because of its unsafe financial policies, and that the Association had been forced to restrict withdrawals by holders of previously purchased shares.
The respondents filed motions to dismiss on the ground that the complaint failed to state a cause of action under § 10 (b) because the petitioners’ with-drawable capital shares were not securities within the meaning of the Securities Exchange Act. The District Court denied the motions to dismiss, ruling that the petitioners’ shares fell within the Act’s definition of securities. However, recognizing that the ruling “involves a controlling question of law as to which there is substantial ground for difference of opinion,” the District Court certified its order for an interlocutory appeal to the Court of Appeals for the Seventh Circuit under 28 U. S. C. § 1292 (b). The Court of Appeals, with one judge dissenting, agreed with respondents that the with-drawable capital shares issued by City Savings did not fit the definition of securities in §3 (a) (10) of the Securities Exchange Act. Consequently, it ruled that the District Court was without jurisdiction in the case, and it remanded with instructions to dismiss the complaint. 371 E. 2d 374. Because this case presents an important question concerning the scope of the Securities Exchange Act, we granted certiorari. 387 U. S. 941. We disagree with the construction placed on § 3 (a) (10) by the Court of Appeals, and we reverse its judgment.
Section 3 (a) (10) of the Securities Exchange Act of 1934 provides:
“3. (a) When used in this title, unless the context otherwise requires—
“(10) The term ‘security’ means any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, or in general, any instrument commonly known as a ‘security’; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange, or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.”
This case presents the Court with its first opportunity to construe this statutory provision. But we do not start with a blank slate. The Securities Act of 1933 (48 Stat. 74, as amended) contains a definition of security virtually identical to that contained in the 1934 Act. Consequently, we are aided in our task by our prior decisions which have considered the meaning of security under the 1933 Act. In addition, we are guided by the familiar canon of statutory construction that remedial legislation should be construed broadly to effectuate its purposes. The Securities Exchange Act quite clearly falls into the category of remedial legislation. One of its central purposes is to protect investors through the requirement of full disclosure by issuers of securities, and the definition of security in § 3 (a) (10) necessarily determines the classes of investments and investors which will receive the Act’s protections. Finally, we are reminded that, in searching for the meaning and scope of the word “security” in the Act, form should be disregarded for substance and the emphasis should be on economic reality. S. E. C. v. W. J. Howey Co., 328 U. S. 293, 298 (1946).
Because City Savings’ authority to issue withdrawable capital shares is conferred by the Illinois Savings and Loan Act, we look first to the legal character imparted to those shares by that statute. The issuance of with-drawable capital shares is one of two methods by which Illinois savings and loan associations are authorized to raise capital. City Savings’ capital is represented exclusively by withdrawable capital shares. Each holder of a withdrawable capital share becomes a member of the association and is entitled to “the vote of one share for each one hundred dollars of the aggregate withdrawal value of such accounts, and shall have the vote of one share for any fraction of one hundred dollars.” The holders of withdrawable capital shares are not entitled to a fixed rate of return. Rather, they receive dividends declared by an association’s board of directors and based on the association’s profits. The power of a holder of a withdrawable capital share to make voluntary withdrawals is restricted by statute While withdrawable capital shares are declared nonnegotiable and not subject to Article 8 of the Uniform Commercial Code, such shares can be transferred “by written assignment accompanied by delivery of the appropriate certificate or account book.”
While Illinois law gives legal form to the withdrawable capital shares held by the petitioners, federal law must govern whether shares having such legal form constitute securities under the Securities Exchange Act. Even a casual reading of §3 (a) (10) of the 1934 Act reveals that Congress did not intend to adopt a narrow or restrictive concept of security in defining that term. As this Court observed with respect to the definition of security in § 2 (1) of the Securities Act of 1933, “the reach of the Act does not stop with the obvious and commonplace.” S. E. C. v. C. M. Joiner Corp., 320 U. S. 344, 351 (1943). As used in both the 1933 and 1934 Acts, security “embodies a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” S. E. C. v. W. J. Howey Co., supra, at 299. We have little difficulty fitting the withdrawable capital shares held by the petitioners into that expansive concept of security. Of the several types of instruments designated as securities by §3 (a) (10) of the 1934 Act, the petitioners’ shares most closely resemble investment contracts. “The test [for an investment contract] is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.” Id., at 301. Petitioners are participants in a common enterprise— a money-lending operation dependent for its success upon the skill and efforts of the management of City Savings in making sound loans. Because Illinois law ties the payment of dividends on withdrawable capital shares to an apportionment of profits, the petitioners can expect a return on their investment only if City Savings shows a profit. If City Savings fails to show a profit due to the lack of skill or honesty of its managers, the petitioners will receive no dividends. Similarly, the amount of dividends the petitioners can expect is tied directly to the amount of profits City Savings makes from year to year. Clearly, then, the petitioners’ withdrawable capital shares have the essential attributes of investment contracts as that term is used in § 3 (a) (10) and as it was defined in Howey. But we need not rest our decision on that conclusion alone. “Instruments may be included within any of [the Act’s] definitions, as matter of law, if on their face they answer to the name or description.” S. E. C. v. C. M. Joiner Corp., supra, at 351. The petitioners’ shares fit well within several other descriptive terms contained in §3 (a) (10). For example, the petitioners’ shares can be viewed as “certificate [s] of interest or participation in any profit-sharing agreement.” The shares must be evidenced by a certificate, and Illinois law makes the payment of dividends contingent upon an apportionment of profits. These same factors make the shares “stock” under § 3 (a) (10). Finally, the petitioners’ shares can be considered “transferable share[s]” since “[t]he holder of a withdrawable capital account may transfer his rights therein absolutely or conditionally to any other person eligible to hold the same.”
Our conclusion that a withdrawable capital share is a security within the meaning of § 3 (a) (10) is reinforced by the legislative history of federal securities legislation. When Congress was considering the Securities Act of 1933, representatives of the United States Building and Loan League appeared before House and Senate committees to plead the cause of the League’s members. The League’s spokesmen asked Congress for an exemption from the Act’s registration requirements for building and loan association shares. The spokesmen argued that the cost of complying with the registration, requirements whenever a building and loan association issued a new share would be prohibitive. However, the League’s spokesmen emphatically endorsed the coverage of building and loan associations under the Act’s antifraud provisions. Thus, Morton Bodfish, the League’s Executive Manager, told the House Committee on Interstate and Foreign Commerce:
“When a person saves his money in a building and loan association, he purchases shares and nearly all of our $8,000,000,000 of assets are in the form of shares ....
“The practical difficulties of an association having to register every issue of shares . . . are obvious.
“[W]e approve vigorously and are quite willing to be subject to section 13, which is the fraud section . . . ,
“Now, gentlemen, we want you to leave, the fraud sections there, just as they are, so that [if] any fraud developed in connection with the management of any of our institutions anywhere or under the name of building and loan, this law can be effective and operative.”
Congress responded to the appeals from the building and loan interests by including in §3 (a)(5) of the 1933 Act an exemption from the registration requirements for “[a]ny security issued by a building and loan association, homestead association, savings and loan association, or similar institution . . . .” It seems quite apparent that the building and loan interests would not have sought an exemption from the registration requirements and Congress would not have granted it unless there was general agreement that the Act's definition of security in § 2 (1) brought building and loan shares within the purview of the Act.
The same Congress which passed the Securities Act in 1933 approved the Securities Exchange Act in 1934, and the definition of security contained in the 1934 Act is virtually identical to that in the earlier enactment. The legislative history of the 1934 Act is silent with respect to savings and loan shares, but the Senate Report on the Act asserts that its definition of security was intended to be “substantially the same as [that contained] in the Securities Act of 1933.” S. Rep. No. 792, 73d Cong., 2d Sess., 14 (1934). In addition, when Congress amended the 1934 Act in 1964 to provide for the registration of certain equity securities, it provided an exemption for “any security . . . issued by a savings and loan association . . . .” 15 U. S. C. § 781 (g)(2)(C). Thus, the 1934 Act has a pattern of coverage and exemption of savings and loan shares similar to the pattern in the 1933 Act.
We view the Court of Appeals’ conclusion that the petitioners’ withdrawable capital shares are not securities as a product of misplaced emphasis. After reviewing the definition of security in §3(a) (10), the Court of Appeals stated that “[t]he type of interest now before us, if it is covered by this definition, must be an ‘instrument commonly known as a “security.” ’ ” 371 F. 2d, at 376. Thus, the Court of Appeals read the words an “instrument commonly known as a ‘security’ ” in § 3 (a) (10) as a limitation on the other descriptive terms used in the statutory definition. This, of course, is contrary to our decision in Joiner where we rejected the respondents’ invitation to “constrict the more general terms substantially to the specific terms which they follow.” 320 U. S., at 350. In addition, we cannot agree with the Court of Appeals’ analysis which led it to conclude that a withdrawable capital share is not an “instrument commonly known as a ‘security.’ ” For example, the Court of Appeals stressed that withdrawable capital shares can be issued in unlimited amounts and their holders have no pre-emptive rights. Yet the same is true of shares in mutual funds, and we have little doubt that such shares are securities within the meaning of the Securities Exchange Act. The Court of Appeals also emphasized that the withdrawable capital shares are made nonnegotiable by Illinois law. This simply reflects the fact that such shares are not a usual medium for trading in the markets. The same can be said for the types of interests which we found to be securities in Howey and Joiner. The Court of Appeals noted further that the holders of withdrawable capital shares are not entitled under Illinois law to inspect the general books and records of the association. Inspection of that nature, however, is not a right which universally attaches to corporate shares. In short, the various factors highlighted by the Court of Appeals in concluding that the withdrawable capital shares are not an “instrument commonly known as a ‘security’ ” serve only to distinguish among different types of securities. They do not, standing alone, govern whether a particular instrument is a security under the federal securities laws.
The Court of Appeals thought it highly significant that the term “evidence of indebtedness” appears in the definition of security in the 1933 Act but was omitted from the definition in the 1934 Act. We cannot agree that the omission has any controlling significance in this case. For one thing, we have found other descriptive terms in § 3 (a)(10) which cover the petitioners’ withdrawable capital shares. The Court of Appeals’ emphasis on the omission of “evidence of indebtedness” from §3 (a) (10) flowed from its conclusion that the petitioners’ “relationship with the enterprise is much more that of debtor-creditor than investment.” 371 F. 2d, at 377. That assertion, however, overlooks the fact that, under Illinois law, the holder of a withdrawable capital share does not become a creditor of a savings and loan association even when he files an application for withdrawal. For this reason alone, the omission of the term “evidence of indebtedness” from § 3 (a) (10) provides no basis for concluding that Congress intended to exclude the petitioners’ withdrawable capital shares from the Act’s coverage.
The Court of Appeals sought a policy basis for its decision when it noted that the federal securities laws “were passed in the aftermath of the great economic disaster of 1929. Congress was concerned with speculation in securities which had a fluctuating value and which were traded in securities exchanges or in over-the-counter markets.” 371 F. 2d, at 377. This statement suggests, and the respondents have argued in this Court, that the petitioners’ withdrawable capital shares are not within the purview of the 1934 Act because their value normally does not fluctuate and because they are normally not traded in securities exchanges or over-the-counter. The accuracy of this assertion is open to question.. But, more important, it is irrelevant to the question before us. As was observed in Howey, “it is immaterial whether the enterprise is speculative or non-speculative.” 328 U. S., at 301.
Policy considerations lead us to conclude that these petitioners are entitled to the investor protections afforded by the Securities Exchange Act. We agree fully with the following observations made by Judge Cummings in his dissent below:
“The investors in City Savings were less able to protect themselves than the purchasers of orange groves in Howey. These [petitioners] had to rely completely on City Savings’ management to choose suitable properties on which to make mortgage loans. . . . The members of City Savings were widely scattered. Many of them probably invested in City Savings on the ground that their money would be safer than in stocks. . . . Because savings and loan associations are constantly seeking investors through advertising . . . the SEC’s present tender of its expert services should be especially beneficial to would-be savings and loan investors as a shield against unscrupulous or unqualified promoters.” 371 F. 2d, at 384-385.
The respondents have argued that we should not declare the petitioners’ withdrawable capital shares securities under §3(a)(10) because the petitioners, if they are successful in their suit for rescission, will gain an unfair advantage over other investors in City Savings in the distribution of the limited assets of that Association, which is now in liquidation. This argument, at best, is a non sequitur. This case in its present posture involves no issue of priority of claims against City Savings. This case involves only the threshold question of whether a federal court has jurisdiction over the complaint filed by the petitioners — a question which turns on our construction of the term “security” as defined by § 3 (a) (10) of the Securities Exchange Act of 1934. It is totally irrelevant to that narrow question of statutory construction that these petitioners, if they are successful in their federal suit, might have rights in the limited assets of City Savings superior to those of other investors in that Association.
Reversed.
Mr. Justice Marshall took no part in the consideration and decision of this case.
Ill. Rev. Stat., c. 32, §§ 701-944.
The members of the class were identified in the complaint as “more than 5,000 investors [who] have purchased securities [i. e., withdrawable capital shares] of City Savings since July 23, 1959 . . . The total investment of the class members was alleged to amount to “between fifteen and twenty million dollars.”
The state officials had acted under the authority of Ill. Rev. Stat., c. 32, § 848. The record does not disclose the precise reason for placing City Savings under state custody. However, the complaint filed in the District Court and the petitioners’ brief in this Court suggest that City Savings has been the victim of mismanagement of major proportions.
The voluntary plan of liquidation was formally approved four days after the petitioners had filed their complaint. However, the three liquidators had been nominated prior to the filing of the complaint, and their election had been a foregone conclusion. Voluntary liquidation is authorized bj' Ill. Rev. Stat., e. 32, Art. 9.
15 U. S. C. §78e (a) (10).
15 TJ. S. C. §78j (b).
17 CFR § 240.10b-5.
“2. When used in this title, unless the context otherwise requires—
“(1) The term ‘security’ means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of int'erest or partieipation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or, in general, any interest or instrument commonly known as a ‘security’. . . .” 48 Stat. 905.
S. E. C. v. United Benefit Life Ins. Co., 387 U. S. 202 (1967); 8. E. C. v. Variable Annuity Life Ins. Co., 359 U. S. 65 (1959); S. E. C. v. W. J. Howey Co., 328 U. S. 293 (1946); and S. E. C. v. C. M. Joiner Corp., 320 U. S. 344 (1943).
The Securities Exchange Act was a product of a lengthy and highly publicized investigation by the Senate Committee on Banking and Currency into stock market practices and the reasons for the stock market crash of October 1929. See Loomis, The Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, 28 Geo. Wash. L. Rev. 214, 216-217 (1960).
“The capital of an association may be represented by with-drawable capital accounts (shares and share accounts) or permanent reserve shares, or both . . . Ill. Rev. Stat., c. 32, § 761 (a). “Permanent reserve shares shall constitute a secondary reserve out .of which losses shall be paid after all other available reserves have been exhausted . . . .” Id., § 763.
Id., §741 (a)(1).
Id., §742 (d)(2). Each borrower from a savings and loan association automatically becomes a member of the association, id., §741 (a)(2), but is entitled to only one vote, id., §742 (d)(4).
Id., §778 (c). The directors are required to apportion an association’s profits at least annually.
Id., §773.
Id., §768 (c).
Id., §768 (b).
Cf. S. E. C. v. Variable Annuity Life Ins. Co., 359 U. S. 65, 69.
“[T]he term 'security’ [in the Securities Act of 1933 is defined] in sufficiently broad and general terms so as to include within that definition the many types of instruments that in our commercial world fall within the ordinary concept of a security.” H. It. Rep. No. 85, 73d Cong., 1st Sess., 11 (1933).
Ill. Rev. Stat., c. 32, § 778.
The Court of Appeals refused to apply the Howey test in this case. It did not view the petitioners as entering a common enterprise with profits to come solely from the efforts of others because “profit is derived from loans to other members of the savings and loan association.” 371 F. 2d, at 377. That analysis, however, places too much emphasis on the fact that, under Illinois law, anyone who borrows from a savings and loan association automatically becomes a member of the association. Ill. Rev. Stat., c. 32, § 741 (a) (2). It also overlooks the several other classes of investments which Illinois savings and loan associations are authorized to make. Id,., §§ 792-792.10.
Id., §768 (a).
Id., § 768 (b).
Hearings on H. H. 4314 before the House Committee on Interstate and Foreign Commerce, 73d Cong., 1st Sess., 70-75 (1933) (testimony of Morton Bodfish, Executive Manager, United States Building and Loan League); Hearings on S. 875 before the Senate Committee on Banking and Currency, 73d Cong., 1st Sess., 50-54 (1933) (testimony of C. Clinton James, Chairman, Federal Legislative Committee of the United States Building and Loan League).
Hearings on H. B.. 4314, supra, at 71.
Id,., at 73.
Id., at 74.
15 U. S. C. §77e (a) (5).
The view expressed by the building and loan association interests in 1933 has not changed over the years. The United States Savings and Loan League, in its Membership Bulletin, made the following comments on the Court’s decision to hear this case:
“This case is not necessarily as significant and earth shaking in its implications as many savings and loan people assume. In the first place the savings and loan business always has assumed that it was subject to the antifraud provisions of the Securities Acts relating to advertising practices, etc. Regardless of how this case goes it does not mean that savings and loan associations will be any more involved with the SEC than they have been in the past. It does not mean that associations would have to register with the SEC and be subject to all of the rules that apply to typical securities transactions.”
United States Savings and Loan League, Membership Bulletin, June 28, 1967, p. 15.
The Court of Appeals rejected the view that we take of the legislative history of federal securities legislation with respect to savings and loan association shares. In effect, the Court of Appeals viewed Congress’ exemption of savings and loan shares from the registration requirements as what Professor Loss calls “supererogation.” 1 Loss, Securities Regulation 497 (2d ed. 1961). The Court of Appeals based its argument on the analogy it drew between ordinary insurance policies, which are also exempted from the 1933 Act’s registration provisions, and savings and loan shares. The analogy, however, is inappropriate. Congress specifically stated that “insurance policies are not to be regarded as securities subject to the provisions of the act,” H. R. Rep. No. 85, 73d Cong., 1st Sess., 15 (1933), and the exemption from registration for insurance policies was clearly supererogation. See S. E. C. v. Variable Annuity Life Ins. Co., 359 U. S. 65, 74, n. 4. The same cannot be said for savings and loan shares, particularly when the spokesmen for those who issue savings and loan shares had told Congress they fully expected to be covered by the 1933 Act’s antifraud provisions.
In Howey, this Court ruled that interests in orange groves were securities under the 1933 .Act. In Joiner, it held that oil leases were securities under the Act.
See Baker & Cary, Cases and Materials on Corporations 739-741 (3d ed. 1958).
Ill. Rev. Stat., c. 32, §773 (f).
The SEC, in its brief amicus curiae submitted in this case, points out that it granted a temporary exemption from §§ 7, 8, 12, and 13 of the 1934 Act to passbooks of savings and loan associations, which were being traded on the Cleveland Stock Exchange shortly after the Act’s passage. The SEC also points out that it has repeatedly enforced the Act’s registration provisions against brokers and dealers whose business includes the solicitation of funds for deposit in savings and loan associations. Brief for the SEC 22-24.
Question: Consider that the petitioning party lost if the Supreme Court affirmed or dismissed the case, or denied the petition. Consider that the petitioning party won in part or in full if the Supreme Court reversed, reversed and remanded, vacated and remanded, affirmed and reversed in part, affirmed and reversed in part and remanded, or vacated the case. Did the petitioning win the case?
A. Yes
B. No
Answer:
|
songer_genresp1
|
I
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed respondent.
UNITED STATES v. BLACK et al.
No. 3085.
Circuit Court of Appeals, First Circuit.
March 11, 1936.
J. Frank Staley, of Washington, D.: C. (John D. Clifford, Jr., U. S. Atty.', of Portland, Me., on the brief), for appellant.
Albert T. Gould, of Boston, Mass. (Harry C. Wilbur, of 'Portland, Me., on the brief), for appellees.
Before BING.HAM,. WILSON, and MORTON, Circuit Judges.
MORTON, Circuit Judge.
This is a case of collision between the two-masted schooner Oakwoods and United States submarine R-3. It is brought,under authority of a special act of Congress, 47 Stat. 1719, c. 66, approved February 14, 1933. The District Judge held the submarine solely at fault and awarded full damages to the libelant. The government has appealed.
The collision occurred after dark in the evening of November 24, 1919, in the upper end of Buzzards Bay just outside the en-e trance to the dredged channel leading into the Cape Cod Canal. It was a clear dark night. The submarine had come out through the channel and was getting ready to anchor for the night in the upper part of the Bay. The schooner was coming up the Bay bound through the Canal; her master intended to anchor for the night to the south and west of the entrance channel. At the time of the collision she was going to windward on the port tack with slightly . started sheets heading about north northwest; there was a moderate breeze and she was making about four miles per hour. The submarine after leaving the entrance channel proceeded about southwest by south. The collision occurred nearly in line, with the channel if extended and perhaps one-third of a mile outside the end of it. The schooner’s course took her across the submarine’s bow from left to right, and the submarine struck her on the starboard side. The schooner sank almost immediately.
The schooner was, of course, the privileged vessel, whose duty it was to keep her course and speed. It was the duty of the submarine to keep out of her way. The only excuse advanced for the submarine’s failure to do so is that the schooner was not showing a proper green side-light. The schooner’s navigation is criticized, by the. defendant at many points, beginning as far away as Long Island Sound, and the watch kept during the preceding night. But the only question is whether she was showing a proper green side-light at’the time of the collision. Her master’s testimony was that he was running the schooner with only one other man; that both of them were on deck for some time before the accident; that he-was steering and the sailor was. forward o.n lookout; that. the lights of the submarine were noticed before she came out o.f the channel several miles distant and were under observation from that, time until the collision; that two or three times during this interval the lookout inspected the schooner’s lights and reported them as all right, the last time only, a few; minutes before the collision; that the schooner kept her course and the submarine ran into her and sank her. When the case Came up for trial, sixteen years after the accident, all trace of the sailor had been lost; he could not be found to testify. The schooner’s case rests therefore on the testimony of her master alone. The District Judge saw no sufficient reason to rej ect it.
There were two officers in the conning tower of the submarine as she came out of the entrance channel, and about that time a third man came up from below whose duty it was to assist in anchoring her. The attention of all of them was probably directed to preparations for anchoring. A fourth man was on deck but not where he could see ahead. There was nobody at all on the submarine who had the assigned duty of lookout. The schooner was not discovered on board the submarine until the latter’s bow light reflected on her sails. The vessels were then so close together that collision was unavoidable.
It is strongly pressed upon us that if the schooner’s green light had been properly burning, one of the two officers or Eliot, the third man, must have seen it; and the fact that they did not do so outweighs the interested and uncontrolled testimony of the schooner’s master. This is the only disputable point in the case. That the schooner’s light was burning is clear. The defendant’s answer states that: “Immediately after sighting the sails, the schooner’s starboard light was made out burning very dimly.” There is a similar notation in the submarine’s logbook. We are not impressed by the effort made at the trial to disaffirm and repudiate these statements.
The final question therefore 'is whether the light though burning was not burning properly; and the only evidence against the libelant on this point is the failure of the men on the submarine to notice the light earlier and their testimony that it was burning dimly. On the latter point, as the District Judge observed, a judgment of the brightness of such a light made under the stress and excitement of impending collision, which might endanger the submarine as well as the other vessel, cannot be accorded much weight. Moreover, the green light was observed in the glare of -the submarine’s bow light — her officers spoke of reflections from the bow light on the green glass of the side-light — whiqh would tend to make it look dim. The failure of men, who had no special duty of lookout and whose attention was otherwise engaged, to notice the light by no means so clearly outweighs the other evidence as to require us to hold that the District Judge was clearly wrong in finding that light was properly burning. As he observed, there were the strongest possible reasons why the master of the schooner should look after her lights when he saw those of an approaching steamer. The fact established by the evidence from the submarine that the light was burning corroborates his testimony in a substantial way.
The small size of. the schooner’s crew did not in any way enter into the accident; it would have made no difference if there had been twenty men on - her deck. We agree with the District Judge that the schooner was free from fault.
The absence of an assigned lookout on the submarine in such crowded waters at night cannot be regarded as other than a grave fault. It probably caused the accident. Dahlmer v. Bay State Dredging & Contracting Co. (C.C.A.) 26 F.(2d) 603; The Arthur M. Palmer (D.C.) 115 F. 417.
The decree of the District Court is affirmed, with costs.
Question: What is the nature of the first listed respondent?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_civproc1
|
0
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited federal rule of civil procedure in the headnotes to this case. Answer "0" if no federal rules of civil procedure are cited. For ties, code the first rule cited.
Donald BAXTER, Appellant, v. UNITED STATES of America, Appellee.
No. 18211.
United States Court of Appeals District of Columbia Circuit.
Argued July 7, 1964.
Decided July 23, 1964.
Petition for Rehearing en Banc Denied Nov. 9, 1964.
Mr. Robert W. MeChesney, Jr. (appointed by this court), Washington, D. C., for appellant.
Mr. Anthony A. Lapham, Asst. U. S. Atty., with whom Messrs. David C. Acheson, U. S. Atty., and Frank Q. Nebeker and Victor W. Caputy, Asst. U. S. Attys., were on the brief, for appellee.
Before Fahy, Weight and McGowan, Circuit Judges.
PER CURIAM.
The appeal is from a judgment of conviction of robbery, in violation of D.C. Code § 22-2901, and is rested upon the admission of evidence now claimed to have been inadmissible. In view of all the circumstances of the case we think it is not one for the exercise of our discretion permitted by Rule 52(b), Fed.R. Crim.P.
Affirmed.
Question: What is the most frequently cited federal rule of civil procedure in the headnotes to this case? Answer with a number.
Answer:
|
songer_respond1_1_4
|
F
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "transportation". Your task is to determine what subcategory of business best describes this litigant.
SOMERVILLE v. CAPITAL TRANSIT CO. SOMERVILLE v. DAY.
Nos. 10599, 10698.
United States Court of Appeals District of Columbia Circuit.
Argued June 1, 1951.
Decided Sept. 21, 1951.
Mr. Dorsey K. Offutt, Washington, D. C., for appellant.
Mr. Paul R. Connolly, Washington, D. C., with whom Mr. John J. Sirica, Washington, D. C., was on the brief, for appel-lee Capital Transit Co.
Mr. Albert F. Adams, Washington, D. C., for appellee Howard Day.
Before CLARK, WILBUR K. MILLER and FAHY, Circuit Judges.
FAHY, Circuit Judge.
The appellant, Margaret Elizabeth Som-erville, brought suit in the District Court against appellees Howard Day and the Capital Transit Company. She sought to recover for injuries allegedly sustained in a collision between the taxicab in which she was riding and which was operated by Day and a streetcar owned and operated by the Capital Transit Company. The case was tried before a jury who returned a verdict against appellant as to the Capital Transit Company but in appellant’s favor against Day. Upon timely motion thereafter filed by the latter, the District Court granted a new trial as to the issues between appellant and Day and denied a new trial against the Capital Transit Company. On the second trial the jury found in Day’s favor. In due course appellant brought these appeals which are consolidated for hearing. She urges that it was an abuse of discretion for the trial court, in granting a new trial, to fail to do so as to the Capital Transit Company, and in not limiting the new trial against Day to the issue of damages only.
It is a familiar principle that the grant or denial of a new trial rests in the sound discretion of the trial judge and that the exercise of this discretion will not be disturbed on review except for abuse. Kenyon v. Youngman, 1930, 59 App.D.C. 300, 40 F.2d 812; Atlantic Greyhound Lines v. Keesee, 1940, 72 App.D.C. 45, 111 F.2d 657; Ecker v. Potts, 1940, 72 App.D.C. 174, 112 F.2d 581; Ryan v. U. S., Duncan v. U. S., 89 U.S.App.D.C. -, 191 F.2d 779, decided July 26, 1951. Abuse is ordinarily established by showing that the trial court acted without authority, Freid v. McGrath, 1942, 76 U.S.App.D.C. 388, 133 F.2d 350, for an erroneous reason, cf. National Ben. Life Ins. Co. v. Shaw-Walker Co., 1940, 71 App.D.C. 276, 286, 111 F.2d 497, 507, or arbitrarily and without justification in light of all the circumstances as shown by a review of the record as a whole, Cornwell v. Cornwell, 1941, 73 App.D.C. 233, 118 F.2d 396; Boyle v. Bond, 1951, 88 U.S.App. D.C. 178, 187 F.2d 362.
In the instant case the motion for a new trial filed by Day recited numerous grounds, including, inter alia, that the verdict was contrary to the evidence, error of the trial court in refusing to give proffered instructions, excessiveness of the verdict, and newly discovered evidence. Which of these grounds were relied upon by the trial court in acting on the motion does not appear from the court’s order, from ‘anything printed in the joint appendix, or from anything in the transcripts lodged with this court. Neither does the joint appendix nor said transcripts contain any record of the evidence produced on the first trial. In short, the state of the record before us precludes at the outset a finding of abuse in this case, unless we were to rule that the granting of a new trial as to one of two defendants sued jointly in tort is per se an abuse. That this is not the case is clear from the terms of Rule 59(a), Fed.R. Civ.P., 28 U.S.C.A., alone. See also Dollar S. S. Lines v. Merz, 9 Cir., 1934, 68 F.2d 594, 595; United Retail C. & T. Ass’n v. Denahan, D.C.Mun.App.1945, 44 A.2d 69. Indeed, prior to the Federal Rules of Civil Procedure it was the practice for courts to order “a new trial only for those parties prejudiced by the judgment.” 3 Moore’s Federal Practice 3248 (1st Ed.). Accordingly, we cannot characterize the action of the trial court in granting a new trial in the manner done here as an abuse of discretion.
The appellant also urges as error the denial of three requested instructions in the second trial. Two of these were drawn on the premise that the Capital Transit Company was a party defendant in the second trial. The other was drawn on the premise that the retrial was limited solely to the question of damages. These premises being contrary to the ‘actual situation which pertained, the requests were properly denied.
Affirmed.
. Capitol Cab Association was also named as a party defendant in the complaint, but the appellant .dismissed the action as against it at pretrial proceedings.
. Rule 59. New Trials; Amendment o£ Judgments
“(a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues (1) in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States; * * (Emphasis added.)
. An affidavit accompanied the motion of Day for new trial. It set forth at some length that plaintiff had suffered injuries in another accident, prior to the trial, and did not inform the jury of these injuries, alleged to be similar to those claimed to have resulted from the accident in suit. Were we to infer that this affidavit furnished the basis for the award of a new trial to Day, our conclusion would be the same; that is, we could not say the court abused its discretion in denying a new trial against the Capital Transit Company, no error appearing in the trial which resulted favorably to that defendant, or in opening the new trial as to Day to both liability and injury. We have no solid basis on the record for holding that the affidavit, assuming it was the basis of the court’s action, might not have justified a rehearing of the testimony as to liability as well as to injury.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "transportation". What subcategory of business best describes this litigant?
A. railroad
B. boat, shipping
C. shipping freight, UPS, flying tigers
D. airline
E. truck, armored cars
F. other
G. unclear
Answer:
|
sc_adminaction_is
|
B
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify whether administrative action occurred in the context of the case prior to the onset of litigation. The activity may involve an administrative official as well as that of an agency. To determine whether administration action occurred in the context of the case, consider the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations.
EXAMINING BOARD OF ENGINEERS, ARCHITECTS AND SURVEYORS et al. v. FLORES de OTERO
No. 74-1267.
Argued December 8, 1975
Decided June 17, 1976
BlackmuN, J., delivered the opinion of the Court, in which Burger, C. J., and BreNNAN, Stewart, White, Marshall, and Powell, JJ., joined. RehNquist, J., filed an opinion dissenting in part, post, p. 606. SteveNS, J., took no part in the consideration or decision of the case.
Miriam, Naveira De Rodon, Solicitor General of Puerto Rico, argued the cause for appellants. With her on the brief was Peter Ortiz, Deputy Solicitor General.
Max Ramirez de Arellano argued the cause for ap-pellees. With him on the brief was Santos P. Amadeo.
Together with Examining Board of Engineers, Architects and Surveyors et al. v. Perez Nogueiro, also on appeal from the same court (see this Court’s Rule 15 (3)).
Solicitor General Bork, Assistant Attorney General Lee, Howard E. Shapiro, and David M. Cohen filed a brief for the United States as amicus curiae.
Mr. Justice Blackmun
delivered the opinion of the Court.
This case presents the issue whether the United States District Court for the District of Puerto Rico possesses jurisdiction, under 28 U. S. C. § 1343 (3), to entertain a suit based upon 42 U. S. C. § 1983, and, if the answer is in the affirmative, the further issue whether Puerto Rico’s restriction, by statute, of licenses for civil engineers to United States citizens is constitutional. The first issue, phrased another way, is whether Puerto Rico is a “State,” for purposes of § 1343 (3), insofar as that statute speaks of deprivation “under color of any State law”; the resolution of that question was reserved in Calero-Toledo v. Pearson Yacht Leasing Co., 416 U. S. 663, 677 n. 11 (1974).
I
A. Puerto Rico’s Act of May 10, 1951, No. 399, as amended, now codified as P. R. Laws Ann., Tit. 20, §§ 681-710 (Supp. 1973), relates to the practice of engineering, architecture, and surveying. The administration and enforcement of the statute, by § 683, are committed to the Commonwealth’s Board of Examiners of Engineers, Architects, and Surveyors, an appellant here. Section 689 sets forth the qualifications “for registration as licensed engineer^ architect or surveyor.” For a “licensed engineer or architect,” these qualifications in-elude a specified education, the passing of a written examination, and a stated minimum practical experience. The statute also requires that an applicant for registration be a citizen of the United States. It, however, exempts an otherwise qualified alien from the citizenship requirement if he has “studied the total courses” in the Commonwealth, or if he is employed by an agency or instrumentality of the government of the Commonwealth or by a municipal government or public corporation there; in the case of such employment, the alien receives a conditional license valid only during the time he is employed by the public entity.
B. Maria C. Flores de Otero is a native of Mexico and a legal resident of Puerto Rico. She is, by profession, a civil engineer. She is not a United States citizen. In June 1972 she applied to the Board for registration as a licensed engineer. It is undisputed that the applicant met all the specifications of formal education, examination, and practice required for licensure,- except that of United States citizenship. The Board denied her application until she furnished proof of that citizenship.
In October 1973 Flores instituted an action in the United States District Court for the District of Puerto Rico against the Board and its individual members. She asserted jurisdiction under 28 U. S. C. § 1343 (3), and alleged that the citizenship requirement was violative of her rights under 42 U. S. C. §§ 1981 and 1983. A declaratory judgment and injunctive relief were requested.
In their answer to Flores’ complaint, the defendants alleged that the United States District Court lacked jurisdiction to entertain the complaint, and that the provisions of § 689 did not contravene rights secured under the Fifth and Fourteenth Amendments or any rights guaranteed to Flores under the Constitution. They also alleged that Flores had adequate remedies available to her in the courts of Puerto Rico and that she had not exhausted those remedies. They requested that the court “abstain from assuming jurisdiction in this case and allow the Courts of the Commonwealth of Puerto Rico the opportunity to pass upon the issues raised by plaintiff.” App. 5.
C. Sergio Perez Nogueiro is a native of Spain and a legal resident of Puerto Rico. He is, by profession, a civil engineer. He possesses degrees from universities in Spain and Colombia and from the University of Puerto Rico. He is not a United States citizen. He, like Flores, met all the specifications of formal education, examination, and practice required for licensure, except that of United States citizenship. He is presently employed as an engineer by the Public Works Department of the municipality of Carolina, Puerto Rico, and holds a conditional license granted by the Board, as authorized by § 689, after he passed the required examination.
In May 1974 Perez instituted an action against the Board in the United States District Court for the District of Puerto Rico. He asserted that the citizenship requirement “is repugnant to the Due Process Clause of the Fifth or Fourteenth Amendments.” App. 10. The complaint in all relevant respects was like that filed by Flores, and Perez, too, requested declaratory and in-junctive relief, including a full and unconditional license to practice as an engineer in the Commonwealth.
D. A three-judge court was convened to hear Flores’ case. It determined that it had jurisdiction under §§ 1983 and 1343. It concluded that abstention was unnecessary because § 689 was unambiguous and not susceptible of an interpretation that would obviate the need for reaching the constitutional question. On the merits, with one judge dissenting, it rejected the justifications proffered by the defendants for the citizenship requirement. It found that requirement unconstitutional and directed the defendants to license Flores as an engineer.
In a separate and subsequent judgment the same three-judge court, by the same vote, granted like relief to Perez. It decreed that he, too, be licensed as an engineer. Jurisdictional Statement 7a.
Appeals were taken by the defendants from both judgments, with a single jurisdictional statement pursuant to our Rule 15 (3). We noted probable jurisdiction and granted a stay of the execution and enforcement of the judgments. 421 U. S. 986 (1975).
II
On the jurisdictional issue, the appellants do not contend that the United States Constitution has no application in Puerto Rico or that claims' cognizable under § 1983 may not be enforced there. Instead, they argue that unless a complainant establishes the $10,000 juris•dictional amount prescribed by 28 U. S. C. § 1331 (a), a claim otherwise cognizable under § 1983 must be adjudicated in the courts of Puerto Rico.
In approaching this question we are to examine the language of § 1343, the purposes of Congress in enacting it, “and the circumstances under which the words were employed.” Puerto Rico v. Shell Co. (P. R.), Ltd., 302 U. S. 253, 258 (1937); District of Columbia v. Carter, 409 U. S. 418, 420 (1973). As is so frequently the case, however, the language is not free of ambiguity, the purposes appear to be diverse and sometimes contradictory, and the circumstances are not fully spread upon the record for our instruction.
A. The federal civil rights legislation, with which we are here concerned, was enacted nearly 30 years before the conflict with Spain and the resulting establishment of the ties between Puerto Rico and the United States. Both § 1343 (3) and § 1983 have their origin in the Ku Klux Klan Act of April 20, 1871, § 1, 17 Stat. 13. That statute contained not only the substantive provision protecting against “the deprivation of any rights, privileges, or immunities secured by the Constitution” by any person acting under color of state law, but, as well, the jurisdictional provision authorizing a proceeding for the enforcement of those rights “to be prosecuted in the several district or circuit courts of the United States.” Jurisdiction was not independently defined; it was given simply to enforce the substantive rights created by the statute. The two aspects, seemingly, were deemed to coincide.
It has been said that the purpose of the legislation was to enforce the provisions of the Fourteenth, not the Thirteenth, Amendment. District of Columbia v. Carter, 409 U. S., at 423; Lynch v. Household Finance Corp., 405 U. S. 538, 545 (1972); Monroe v. Pape, 365 U. S. 167, 171 (1961). As originally enacted, § 1 of the 1871 Act applied only to action under color of law of any “State.” In 1874, however, Congress, presumably pursuant to its power to “make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States,” granted by the Constitution’s Art. IV, § 3, cl. 2, added, without explanation, the words “or Territory” in the 1874 codification of United States statutes. Rev. Stat. § 1979 (1874). See District of Columbia v. Carter, 409 U. S., at 424 n. 11. The evident aim was to insure that all persons residing in the Territories not be denied, by persons acting under color of territorial law, rights guaranteed them by the Constitution and laws of the United States.
Although one might say that the purpose of Congress was evident, the method chosen to implement this aim was curious and, indeed, somewhat confusing. In the 1874 codification, only the substantive portion (the predecessor of today’s § 1983) of § 1 of the 1871 Act was redesignated as § 1979. It became separated from the jurisdictional portion (the predecessor of today’s § 1343 (3)) which appeared as § 563 Twelfth and § 629 Sixteenth (concerning, respectively, the district courts and the circuit courts) of the Revised Statutes. But the words “or Territory” appeared only in § 1979; they did not appear in §§ 563 and 629.
Our question, then, is whether, in separately codifying the provisions and in having this discrepancy between them, Congress intended to restrict federal-court jurisdiction in some way. We conclude that it intended no such restriction. First, as stated above, the common origin of §§ 1983 and 1343 (3) in § 1 of the 1871 Act suggests that the two provisions were meant to be, and are, complementary. Lynch v. Household Finance Corp., 405 U. S., at 543 n. 7. There is no indication that Congress intended to prevent federal district and circuit courts from exercising subject-matter jurisdiction of claims of deprivation of rights under color of territorial law if they otherwise had personal jurisdiction of the parties. Second, a contrary interpretation necessarily would lead to the conclusion that persons residing in a Territory were not effectively afforded a federal-court remedy there for a violation of the 1871 Act despite Congress’ obvious intention to afford one. The then existing territorial district courts established by Congress were granted “the same jurisdiction, in all cases arising under the Constitution and laws of the United States, as is vested in the circuit and district courts of the United States.” Rev. Stat. § 1910 (1874) (emphasis added). Thus, if the federal district and circuit courts had jurisdiction to redress deprivations only under color of state (but not territorial) law, the territorial courts were likewise so limited. Further, the United States District Courts for the Districts of California and Oregon, and the territorial District Court for Washington possessed jurisdiction over violations of laws extended to the Territory of Alaska. Rev. Stat. § 1957 (1874). Unless the federal courts had jurisdiction to redress deprivations of rights by persons acting under color of territorial law, Congress’ explicit extension of the 1871 Act to provide a remedy against persons acting under color of territorial law was only theoretical because no forum existed in which these rights might be enforced.
This conclusion that Congress granted territorial courts jurisdiction to enforce the provisions of § 1979 is strengthened by two additional factors. First, Congress explicitly provided: “The Constitution and all laws of the United States which are not locally inapplicable shall have the same force and effect within all the organized Territories, and in every Territory hereafter organized as elsewhere within the United States.” Rev. Stat. § 1891 (1874). Section 1979, with its reference to Territories was obviously an applicable statute. Second, it was not until the following year that Congress conferred on United States district courts general federal-question jurisdiction. Act of Mar. 3, 1875, § 1, 18 Stat. 470, now codified as 28 U. S. C. § 1331 (a). See generally Zwickler v. Koota, 389 U. S. 241, 245-247 (1967). Accordingly, unless in 1874 the federal district and circuit courts had jurisdiction to redress deprivations under color of territorial law, Congress, although providing rights and remedies, could be said to have failed to provide a means for their enforcement.
For all these reasons, we conclude that the federal territorial as well as the federal district and circuit courts generally had jurisdiction to redress deprivations of constitutional rights by persons acting under color of territorial law. We turn, then, to the legislation specifically applicable to Puerto Rico.
B. A similar approach was taken by Congress in its establishment of the civil government in Puerto Rico in the exercise of its territorial power under Const., Art. IV, § 3, cl. 2. By the Treaty of Paris, 30 Stat. 1754 (1899), Spain ceded Puerto Rico to the United States. 30 Stat. 1755. Shortly thereafter, the Foraker Act, being the Act of April 12, 1900, 31 Stat. 77, became law. This legislation established a civil government for Puerto Rico, including provisions for courts. The judicial structure so created consisted of a local court system with a Supreme Court, and, as well, of a Federal District Court. The Act, § 34,31 Stat. 84, provided: “The [federal] district court . . . shall have, in addition to the ordinary jurisdiction of district courts of the United States, jurisdiction of all cases cognizant in the circuit courts of the United States.”
On its face, this appears to have been a broad grant of jurisdiction similar to that conferred on the United States district courts and comparable to that conferred on the earlier territorial courts. The earlier territorial grants, however, were different. Whereas the Federal District Court for Puerto Rico was to have “the ordinary jurisdiction of district courts of the United States,” the earlier territorial courts had been given explicitly, by Rev. Stat. § 1910 noted above, “the same jurisdiction, in all cases arising under the Constitution and laws of the United States, as is vested in the circuit and district courts of the United States.” One might expect that the grant of jurisdiction in the former necessarily encompassed or was the same as the grant of jurisdiction in the latter. Congress, however, was divided over the question whether the Constitution extended to Puerto Rico by its own force or whether Congress possessed the power to withhold from Puerto Ricans the constitutional guarantees available to all persons within the several States and the earlier Territories. See S. Rep. No. 249, 56th Cong., 1st Sess. (1900); H. R. Rep. No. 249, 56th Cong., 1st Sess. (1900).
The division within Congress was reflected in the legislation governing Puerto Rico. Thus, despite some support for the measure, see S. Rep. No. 249, pp. 12-13, Congress declined to grant citizenship to the inhabitants of Puerto Rico. 33 Cong. Rec. 3690 (1900). And, in contrast to some earlier territorial legislation, Congress did not expressly extend to Puerto Rico the Constitution of the United States or impose on the statutes of Puerto Rico then in effect the condition that they be continued only if consistent with the United States Constitution.
At the same time, however, Congress undoubtedly was aware of the above-mentioned Rev. Stat. § 1891 providing : “The Constitution and all laws of the United States which are not locally inapplicable shall have the same force and effect ... in every Territory hereafter organized as elsewhere within the United States.” Yet no mention of this statute was made in the Foraker Act. In contrast, two years later, Congress made § 1891 expressly inapplicable when it created a civil government for the Territory of the Philippines. Act of July 1, 1902, c. 1369, § 1, 32 Stat. 692. Moreover, Congress, by § 14 of the Foraker Act, extended to Puerto Rico “the statutory laws [other than the internal revenue laws] of the United States not locally inapplicable,” 31 Stat. 80, and Rev. Stat. § 1979, providing remedies for deprivation of rights guaranteed by the Constitution and laws of the United States by persons acting under color of territorial law was at least potentially “applicable.”
This review of the For alter Act and its legislative history leads to several conclusions: Congress was uncertain of its own powers respecting Puerto Rico and of the extent to which the Constitution applied there. At the same time, it recognized, at least implicitly, that the ultimate resolution of these questions was the responsibility of this Court. S. Rep. No. 249, pp. 9-12; H. R. Rep. No. 249, pp. 9-15, 25-28. Thus Congress appears to have left the question of the personal rights to be accorded to the inhabitants of Puerto Rico to orderly development by this Court and to whatever further provision Congress itself might make for them. The grant of jurisdiction to the District Court in Puerto Rico, nevertheless, appeared to be sufficiently broad to permit redress of deprivations of those rights by persons acting under color of territorial law. See Insular Police Comm’n v. Lopez, 160 F. 2d 673, 676-677 (CA1), cert. denied, 331 U. S. 855 (1947). Nothing in the language of § 34 of the Foraker Act precluded the grant of jurisdiction accorded the earlier territorial courts by Rev. Stat. § 1910, and its language, containing no limitations, cautions us against reading into it an exception not supported by persuasive evidence in the legislative history.
Subsequent legislation respecting Puerto Rico tends to support the conclusion that uncertainty over the application of the Constitution did not lead Congress to deprive the inhabitants of Puerto Rico of a federal forum for vindication of whatever rights did exist. In the Organic Act of 1917, sometimes known as the Jones Act, 39 Stat. 951, Congress made more explicit the jurisdiction of the Federal District Court by according it “jurisdiction of all cases cognizable in the district courts of the United States,” § 41, 39 Stat. 965; generally granted Puerto Rico citizens United States citizenship, § 5, 39 Stat. 953; and codified for Puerto Rico a bill of rights, § 2, 39 Stat. 951. This bill of rights, which remained in effect until 1952, provided Puerto Ricans with nearly all the personal guarantees found in the United States Constitution. The very first provision, for example, read: “That no law shall be enacted in Porto Rico which shall deprive any person of life, liberty, or property without due process of law, or deny to any person therein the equal protection of the laws.” These words are almost identical with the language of the Fourteenth Amendment; and when Congress selected them, it must have done so with the Fourteenth Amendment in mind and with a view to further development by this Court of the doctrines embodied in it. See Kepner v. United States, 195 U. S. 100, 124 (1904). In its passage of the Jones Act, Congress clearly set the stage for the federal court in Puerto Rico to enforce the provisions of § 1983’s predecessor (Rev. Stat. § 1979) which prohibited the deprivation “under color of any statute, ordinance, regulation, custom, or usage, of any . . . Territory ... of any rights, privileges, or immunities secured by the Constitution and laws.” See Munoz v. Porto Rico Ry. Light & Power Co., 83 F. 2d 262, 26A-266 (CA1), cert. denied, 298 U. S. 689 (1936).
The jurisdictional provision of the Act, referring to “all cases cognizable in the district courts of the United States,” remained in effect until 1948. At that time Congress, in the course of a major revision of the Judicial Code, placed the nonterritorial jurisdiction of the District Court of Puerto Rico, as well as the District Court of Hawaii, squarely within Title 28 of the United States Code. It provided: “Puerto Rico constitutes one judicial district.” Act of June 25, 1948, c. 646, § 119, 62 Stat. 889. The stated reason for this change was that “Hawaii and Puerto Rico are included as judicial districts of the United States, since in matters of jurisdiction, powers, and procedure, they are in all respects equal to other United States district courts.” H. R. Rep. No. 308, 80th Cong., 1st Sess., 6 (1947). This confirms our conclusion that until the establishment of the Commonwealth, the Federal District Court in Puerto Rico had the same jurisdiction to enforce the provisions of 42 U. S. C. § 1983 as that conferred by 28 U. S. C. § 1343 (3) and its predecessor statutes on the United States district courts in the several States. See Miranda v. United States, 255 F. 2d 9 (CA1 1958); Insular Police Comm’n v. Lopez, supra.
Only two years later, Congress responded to demands for greater autonomy for Puerto Rico with the Act of July 3, 1950; c. 446, 64 Stat. 319. This legislation, offered, in the “nature of a compact” to “the people of Puerto Rico,” § 1, 48 U. S. C. § 731b, authorized them to draft their own constitution which, however, “shall provide a republican form of government and shall include a bill of rights,” § 2, 48 U. S. C. § 731c. The proposed constitution thereafter submitted declared that it was drafted “within our union with the United States of America,” and that among the “determining factors in our life” were considered “our citizenship of the United States of America” and “our loyalty to the principles of the Federal Constitution.” Preamble of the Constitution of Puerto Rico, 1 P. R. Laws Ann. p. 207 (1965). See note following 48 U. S. C. § 731d. Congress approved the proposed constitution after adding, among other things, a condition that any amendment or revision of the document be consistent with “the applicable provisions of the Constitution of the United States.” 66 Stat. 327. The condition was accepted, the compact became effective, and Puerto Rico assumed “Commonwealth” status. This resulted in the repeal of numerous provisions of the Organic Act of 1917, including the bill of rights that Act contained. Act of July 3, 1950, c. 446, § 5, 64 Stat. 320. The remainder became known as the Puerto Rican Federal Relations Act. § 4, 64 Stat. 319.
The question then arises whether Congress, by entering into the compact, intended to repeal by implication the jurisdiction of the Federal District Court of Puerto Rico to enforce 42 U. S. C. § 1983. We think not. As was observed in Calero-Toledo v. Pearson Yacht Leasing Co., 416 U. S., at 671, the purpose of Congress in the 1950 and 1952 legislation was to accord to Puerto Rico the degree of autonomy and independence normally associated with States of the Union, and accordingly, Puerto Rico “now ‘elects its Governor and legislature; appoints its judges, all cabinet officials, and lesser officials in the executive branch; sets its own educational policies; determines its own budget; and amends its own civil and criminal codq.’ ” See generally Leibowitz, The Applicability of Federal Law to the Commonwealth of Puerto Rico, 56 Geo. L. J. 219, 221 (1967); Magruder, The Commonwealth Status of Puerto Rico, 15 U. Pitt. L. Rev. 1 (1953); Americana of Puerto Rico, Inc. v. Kaplus, 368 F. 2d 431 (CA3 1966), cert. denied, 386 U. S. 943 (1967). More importantly, the provisions relating to the jurisdiction of a Federal District Court in Puerto Rico were left undisturbed, and there is no evidence in the legislative history that would support a determination that Congress intended such a departure. In the absence of a change in the language of the jurisdictional provision or of affirmative evidence in the legislative history, we are unwilling to read into the 1952 legislation a restriction of the jurisdiction of the Federal District Court.
C. Our conclusion not to attribute to Congress an inclination to leave the protection of federal rights exclusively to the local Puerto Rico courts is supported by District of Columbia v. Carter, 409 U. S. 418 (1973). There the Court held that the District was neither a State nor a Territory within the meaning of 42 U. S. C. § 1983. The District, it was observed, occupies a unique status within our system of government. It is the seat of the National Government, and, at the time the Civil Rights Act of 1871 was enacted, Congress exercised plenary power over its activities. These geographical and political considerations, as well as “the absence of any indication in the language, purposes, or history of § 1983 of a legislative intent to include the District within the scope of its coverage,” supported the Court’s conclusion. 409 U. S., at 432.
Appellants, however, focus upon the characterization of the District as “sui generis in our governmental structure,” ibid., and argue that because the Commonwealth of Puerto Rico is also sui generis, the conduct of persons acting under color of Commonwealth law is similarly exempted from scrutiny under § 1983. We readily concede that Puerto Rico occupies a relationship to the United States that has no parallel in our history, but we think that it does not follow that Congress intended to relinquish federal enforcement of § 1983 by restricting the jurisdiction of the Federal District Court in Puerto Rico. It was observed in Carter, 409 U. S., at 427, that Congress, in enacting the civil rights legislation with which we are concerned, recognized that it “had neither the means nor the authority to exert any direct control, on a day-to-day basis, over the actions of state officials,” and that the “solution chosen was to involve the federal judiciary.” Congress similarly lacked effective control over actions taken by territorial officials, although its authority to govern was plenary. The same practical limitations on Congress’ effectiveness to protect the federally guaranteed rights of the inhabitants of Puerto Rico existed from the time of its cession and, after 1952, when Congress relinquished its control over the organization of the local affairs of the island and granted Puerto Rico a measure of autonomy comparable to that possessed by the States, the need for federal protection of federal rights was not thereby lessened. Finally, § 1983, by its terms, applies to Territories; Puerto Rico, but not the District of Columbia, obviously was one of these. Whether Puerto Rico is now considered a Territory or a State, for purposes of the specific question before us, makes little difference because each is included within § 1983 and, therefore, 28 U. S. C. § 1343 (3).
It fallows that the United States District Court for the District of Puerto Rico has jurisdiction under 28 U. S. C. § 1343 (3) to enforce the provisions of 42 U. S. C. § 1983.
Ill
Appellants, however, argue that the District Court should have abstained from reaching the merits of the constitutional claim. Fornaris v. Ridge Tool Co., 400 U. S. 41 (1970), is cited as an example of abstention in a Puerto Rico context. We conclude that the District Court correctly determined that abstention was unnecessary. The case presents no novel question concerning the judicially created abstention doctrine; it requires, instead, only the application of settled principles reviewed just last Term in Harris County Comm’rs Court v. Moore, 420 U. S. 77 (1975).
Appellants urge that abstention was appropriate for two reasons. First, it is said that § 689 should be construed by the commonwealth courts in the light of § 1483 of the Civil Code, P. R. Laws Ann., Tit. 31, § 4124 (1968). This provision imposes liability on a contractor for defective construction of a building. We fail to see, however, how § 4124 in any way could affect the interpretation of § 689 which imposes, with the exceptions that have been noted, a requirement of citizenship for the licensing of an engineer.
Appellants’ second argument is that the commonwealth courts should be permitted to adjudicate the validity of the citizenship requirement in the light of §§ 1 and 7 of Art. II of the Puerto Rico Constitution. 1 P. R. Laws Ann., Const., Art. II, §§ 1, 7 (1965). Section 1 provides: “No discrimination shall be made on account of race, color, sex, birth, social origin or condition, or political or religious ideas.” Section 7 provides: “No person in Puerto Rico shall be denied the equal protection of the laws.” These constitutional provisions are not so interrelated with § 689 that it may be said, as in Harris County, that the law of the Commonwealth is ambiguous. Rather, the abstention issue seems clearly controlled by Wisconsin v. Constantineau, 400 U. S. 433 (1971), where, as it was said in Harris County, 420 U. S., at 8A-85, n. 8, “we declined to order abstention where the federal due process claim was not complicated by an unresolved state-law question, even though the plaintiffs might have sought relief under a similar provision of the state constitution.” Indeed, to hold that abstention is required because § 689 might conflict with the cited broad and sweeping constitutional provisions, would convert abstention from an exception into a general rule.
IV
This takes us, then, to the particular Puerto Rico statute before us. Does Puerto Rico’s prohibition against an alien’s engaging in the private practice of engineering deprive the appellee aliens of “any rights, privileges, or immunities secured by the Constitution and laws,” within the meaning of 42 U. S. C. § 1983?
A. The Court’s decisions respecting the rights of the inhabitants of Puerto Rico have been neither unambiguous nor exactly uniform. The nature of this country’s relationship to Puerto Rico was vigorously debated within the Court as well as within the Congress. See Coudert, The Evolution of the Doctrine of Territorial Incorporation, 26 Col. L. Rev. 823 (1926). It is clear now, however, that the protections accorded by either the Due Process Clause of the Fifth Amendment or the Due Process and Equal Protection Clauses of the Fourteenth Amendment apply to residents of Puerto Rico. The Court recognized the applicability of these guarantees as long ago as its decisions in Downes v. Bidwell, 182 U. S. 244, 283-284 (1901), and Balzac v. Porto Rico, 258 U. S. 298, 312-313 (1922). The principle was reaffirmed and strengthened in Reid v. Covert, 354 U. S. 1 (1957), and then again in Calero-Toledo, 416 U. S. 663 (1974), where we held that inhabitants of Puerto Rico are protected, under either the Fifth Amendment or the Fourteenth, from the official taking of property without due process of law.
The Court, however, thus far has declined to say whether it is the Fifth Amendment or the Fourteenth which provides the protection. Calero-Toledo, 416 U. S., at 668-669, n. 5. Once again, we need not resolve that precise question because, irrespective of which Amendment applies, the statutory restriction on the ability of aliens to engage in the otherwise lawful private practice of civil engineering is plainly unconstitutional. If the Fourteenth Amendment is applicable, the Equal Protection Clause nullifies the statutory exclusion. If, on the other hand, it is the Fifth Amendment and its Due Process Clause that apply, the statute’s discrimination is so egregious that it falls within the rule of Bolling v. Sharpe, 347 U. S. 497, 499 (1954). See also Schneider v. Rusk, 377 U. S. 163, 168 (1964).
B. In examining the validity of Puerto Rico’s virtually complete ban on the private practice of civil engineering by aliens, we apply the standards of our recent decisions in Graham v. Richardson, 403 U. S. 365 (1971); Sugar man v. Dougall, 413 U. S. 634 (1973); and In re Griffiths, 413 U. S. 717 (1973). These cases establish that state classifications based on alienage are subject to “strict judicial scrutiny.” Graham v. Richardson, 403 U. S., at 376. Statutes containing classifications of this kind will be upheld only if the State or Territory imposing them is able to satisfy the burden of demonstrating “that its
Question: Did administrative action occur in the context of the case?
A. No
B. Yes
Answer:
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songer_district
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F
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What follows is an opinion from a United States Court of Appeals. Your task is to identify which district in the state the case came from. If the case did not come from a federal district court, answer "not applicable".
UNDERWRITERS AT LLOYD’S UNDER POLICY NO. LHO 10497, Norton-Simon, Inc. and McCall Publishing Company, Plaintiff-Appellants Cross-Appellees, v. PEERLESS STORAGE COMPANY and Peerless Transportation Company, Defendant-Appellees Cross-Appellants.
Nos. 76-1302, 76-1303.
United States Court of Appeals, Sixth Circuit.
Argued June 13, 1977.
Decided Sept. 8, 1977.
Jon M. Sebaly, Smith & Schnacke, Dayton, Ohio, William T. Smith, Richard A. Getty, Calfee, Halter & Griswold, Robert J. Amsdell, F. Rush McKnight, Cleveland, Ohio, for appellants.
Robert P. Bartlett, Jr., Thomas L. Cze-chowski, Estabrook, Finn & McKee, Dayton, Ohio, for appellees.
Before WEICK and EDWARDS, Circuit Judges, and CECIL, Senior Circuit Judge.
WEICK, Circuit Judge.
We are required in this diversity case to determine the applicable Ohio statute of limitations governing an action by a subro-gated insurer against a bailee to recover the value of personal property injured by fire. The case was tried by the District Judge without a jury, and in a published opinion he adopted findings of fact and conclusions of law. He followed the decision of the Supreme Court of Ohio in Andrianos v. Community Traction Co., 155 Ohio St. 47, 97 N.E.2d 549 (1951), and the decision of this Court in Sears, Roebuck & Co. v. Cleveland Trust Co., 355 F.2d 705 (6th Cir. 1966), and held that the action was governed by Ohio’s two-year statute of limitations, Ohio Rev. Code § 2305.10. Underwriters at Lloyd’s etc. v. Peerless Storage Co., 404 F.Supp. 492 (S.D.Ohio 1975). Although the insured’s proof of loss on the insurer’s form was dated June 2, 1971, the insurer did not file suit until about three and one-half years after the date of the fire. It was therefore barred by the statute of limitations. The District Judge dismissed the action and the plaintiffs have appealed. We affirm.
There was no substantial dispute as to the facts.
Norton-Simon, Inc. and McCall Publishing Company (McCall) entered into a verbal month to month storage agreement with the defendants, Peerless Storage Company and Peerless Transportation Company (herein referred to jointly as Peerless), in which agreement Peerless agreed to store in its Warehouse Number 15 in Dayton, Ohio, a quantity of Norton-Simon’s and McCall rolled paper stock.
On February 27, 1971 a fire destroyed Warehouse 15. The paper stock was damaged extensively, with losses valued at $850,096. No proof was offered as to the cause of the fire but there was substantial evidence that the warehouse had no sprinkler system and no fire walls, and was operated in violation of fire codes. Norton-Simon and McCall were able to recoup only $8,000 in salvage value from its damaged property.
Subsequently Underwriters at Lloyd’s (Lloyd’s) paid Norton-Simon and McCall $750,096. for the loss and damage to said rolled paper stock caused by the fire, against which Lloyd’s had insured under its policy of fire insurance. By reason of this payment Lloyd’s became subrogated to the rights of Norton-Simon and McCall against the defendants for recovery of the loss and damage to the paper stock. Norton-Simon and McCall incurred an uninsured loss of $100,000.
On June 25, 1974 Lloyd’s filed a suit against Peerless in the Federal District Court, some forty months after the fire, claiming damages of $750,096. The complaint alleged that Peerless had breached the oral bailment contract by its failure “to exercise good faith and reasonable skill and diligence in discharging its obligations and responsibilities under said agreement.” In July, 1975 Norton-Simon and McCall intervened as co-plaintiffs under Fed.R.Civ.P. 24(b) claiming damages for $100,000 on the uninsured portion of the loss allegedly resulting from Peerless’ breach of contract.
On October 17, 1974 the District Court entered an order denying Peerless’ motion for summary judgment.
In its published opinion, however, the District Court held that plaintiffs had established a prima facie case of liability and that Peerless as bailee had failed to rebut the plaintiffs’ prima facie case. The District Court, as noted above, ruled that the two-year limitation in § 2305.10 was applicable.
The two Ohio statutes of limitation under consideration provide as follows:
§ 2305.07 Contract not in writing.
Except as provided in section 1302.98 of the Revised Code, an action upon a contract not in writing, express or implied, or upon a liability created by statute other than a forfeiture or penalty, shall be brought within six years after the cause thereof accrued.
§ 2305.10 Bodily injury or injury to personal property.
An action for bodily injury or injuring personal property shall be brought within two years after the cause thereof arose.
Plaintiffs argue that § 2305.10 does not apply to the present cause of action. They contend that the case of Andrianos v. Community Traction Co., supra, is limited to cases involving bodily injuries and injuries to personal property, and not to cases involving predetermined arm’s-length bargained contractual rights and obligations. Plaintiffs assert also that § 2305.10 does not apply to causes of action as in the present case for violation of rights in personal property or for violation of rights arising out of an injury to personal property, but rather that § 2305.10 applies to actions involving injury to persons or tangible things, which actions arise generally in situations where there is fortuitous damage to personal property such as damages resulting from an automobile collision. Peerless, on the other hand, maintains that the Andrianos decision controls in suits to recover damages for injury to personal property irrespective of the form of the action filed.
In Andrianos a bus passenger suffered bodily injuries when the bus driver struck a pillar or stanchion of a viaduct. Nearly four years after the accident the passenger sued the common carrier for violation of an implied contract to provide safe carriage, claiming $30,000 damages. The sole issue before the Ohio Supreme Court was whether the six-year statute of limitations for bringing a contract action under Section 11222 of the General Code (now Ohio Rev. Code § 2305.07), or the two-year statute of limitations on bodily injury under Section 11224-1 of the General Code (now Ohio Rev.Code § 2305.10), applied to the cause of action.
The Court ruled that the latter statute was applicable and dismissed the cause of action. It adopted what it termed the “majority rule” as follows:
The rule prevailing in by far the larger number of jurisdictions is that where a statute, specific in terms, limits the time within which an action for “injuries to the person” or “bodily injury” may be brought, such statute governs all actions the real purpose of which is to recover for an injury to the person, whether based upon contract or tort, and a general statute, limiting the time for bringing an action growing out of a contractual relationship, is without application. (Id., 155 Ohio St. at 50, 97 N.E.2d at 552.)
The Court also held that the two-year statute of limitations applied to all actions concerning bodily injury regardless of the form of action brought. The Andrianos Court noted at 51, 97 N.E.2d at 552:
No matter what form is adopted, the essence of the action is the wrongful injury, and that it arose from the breach of an express or implied contract is immaterial.
Thus, the limitation statutes are concerned with the nature or subject matter of the cause of action, even though the plaintiff may choose whether to sue for damages under a contract or under a tort theory.
The Court concluded at 53, 97 N.E.2d at 553:
In conclusion, Section 11224-1, General Code, is complete in itself and suggests no legislative intent to distinguish between bodily injuries directly and forcibly caused under circumstances where no contractual relationship exists between or among the persons concerned and those resulting from a breach of contract. Until such time as the General Assembly sees fit to make such distinction by an enactment carrying appropriate language to accomplish that purpose, this court must accept and apply the statute as it exists, regardless of hardship to a particular litigant.
It is manifest from a perusal of the amended petition that this is an action for damages upon a claim for bodily injury. It was instituted after the expiration of two years from the date upon which liability arose, and it comes squarely within the two-year limitation prescribed by Section 11224 — 1, General Code. (Footnote added)
Because § 2305.10 refers to injury to personal property as well as bodily injury, it is clear that the Andrianos case applies to both situations. Farbach Chem. Co. v. Commercial Chem. Co., 101 Ohio App. 209, 211-12,136 N.E.2d 363 (1956). See generally, 34 Ohio Jur.2d Limitation of Actions § 30 (1958).
The Ohio lower courts have developed Ohio case law since the Andrianos decision and have applied the limitation of § 2305.10 to cases where contracts have been involved, even to an oral bailment contract such as in the present case.
For example, the Andrianos case was followed, applying § 2305.10, in a case involving violations of a written car-rental agreement in which a rented automobile had been damaged. National Car Rentals v. Allen, 1 Ohio App.2d 321, 204 N.E.2d 554 (1964).
In Bauman Chevrolet, Inc. v. Faust, 66 Ohio Law Abs. 145, 113 N.E.2d 769 (Ct. of Common Pleas of Erie County 1953), the plaintiff sued for breach of an oral bailment contract for the bailee’s alleged failure to return an automobile in as good condition and repair as when the bailee took possession thereof; the car had been damaged beyond repair. The Court relying on the Andrianos decision, applied the two-year statute of limitations under Section 11224-1 of the General Code (now § 2305.10) holding that “a cause of action for damages to personal property arising out of a bailment contract, is governed by [that statute].” Id. at 147, 113 N.E.2d at 771.
Moreover, this Court in the case of Sears, Roebuck & Co. v. Cleveland Trust Co., 355 F.2d 705 (6th Cir. 1966), relied on the Andrianos decision and applied the statute of limitations under § 2305.10 to a lessee’s contract suit for the lessor’s alleged breach of its covenant to deliver a leased building to the lessee in good condition and repair, and for damages to personal property resulting therefrom. Among other things, the Court quoted the following from the District Court’s decision in Tomle v. New York Cent. R.R., 234 F.Supp. 101, 104 (N.D. Ohio 1964):
The Andrianos opinion continues on in language equally forceful and unequivocal to reinforce the Ohio Supreme Court’s pronouncement that the two-year statute of limitations applies to any and all actions to recover for personal injuries. In light of the Andrianos decision, plaintiff’s contention that he is entitled to the benefit of the six-year statute must be rejected. (355 F.2d at 707)
Cf. Mahalsky v. Salem Tool Co., 461 F.2d 581 (6th Cir. 1972) (two-year statute of limitations on injury to personal property applied to claim of express and implied warranties arising out of a sale of an alleged defective augering machine), and Levin v. Bourne, 117 Ohio App. 269, 192 N.E.2d 114 (1962) (§ 2305.10 applicable to automobile negligence suit against minor’s parents for alleged bodily injuries).
In 34 Ohio Jur.2d Limitation of Actions § 31 (1958) it is stated, in part:
§ 31. Bailments. If a breach of a bailment contract by the bailee gives rise to a situation where the action may be brought either in tort or contract, the bailor may elect which remedy he will pursue. Irrespective of the remedy chosen by the bailor, however, where the purpose of the action is solely to recover damages for injury to personal property, such action is governed by the statute of limitations relating to the recovery of damages for injury to personal property, namely, the 2-year statute, and not those relating to recovery of damages for the breach of contract. [Footnotes omitted]
Therefore it is clear that § 2305.10 is applicable to an action arising out of a breach of an oral bailment contract, even where the breach occurred due to a fortuitous situation of fire, as here, and it is equally clear that the pivotal decision in this area of law is the Andrianos case.
In the present case the plaintiffs had the option to sue either under a tort theory for injury to Norton-Simon’s and McCall’s personal property, the rolled paper stock, or under a contract theory for breach of the oral bailment contract. Although the plaintiffs chose the latter option, this Court is bound, under the doctrine of Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), by Ohio substantive law which applies the rule in Andrianos to suits for injury to personal property. It matters not that the case involves a large sum of money or that it will take time to investigate. Since the proof of loss was dated June 2,1971 it appears that the insurer had plenty of time to investigate. Plaintiffs offered no proof that they could not, in the exercise of ordinary diligence, have filed within the two-year statutory period, the same type of short complaint which was filed in the present case.
Here the sole purpose of plaintiffs’ lawsuit was to recover damages for the paper destroyed in the fire, and this Court holds that when the complaint is stripped of its legal terminology, plaintiffs’ cause of action in substance and effect was one for recovery of injury to personal property, and not, as plaintiffs contend, for violation of rights in personal property or for violation of rights arising out of an injury to personal property.
This holding does not mean that in every case wherein personal property has been damaged a suit in contract may not lie which applies a limitation different from § 2305.10. See, e. g., Schulz v. Allstate Ins. Co., 17 Ohio Misc. 83, 244 N.E.2d 546 (Ct. of Common Pleas of Franklin County 1968). There are various cases under Ohio law wherein the cause of action sounded in contract and in no way sought recovery for injuries to body or personal property or where recovery under a tort theory was incidental to the lawsuit. The following cases are examples of this principle and are distinguishable from both the case at bar and the Andrianos decision.
In R. & H. Cartage Co. v. Fought, 111 Ohio App. 230, 171 N.E.2d 369 (1960), the Court applied the fifteen-year statute of-limitations in a suit for a breach of a contract of indemnity for negligence in making delivery of a cargo shipment (spoilage and delay in delivery). The subrogee had already paid the shipper for any losses, but the cause of action did not arise “until the refusal of the defendant to comply on demand under the terms of its contract” covering the shipment with the lessee. Id. at 232, 171 N.E.2d at 371.
In Farbach Chem. Co. v. Commercial Chem. Co., 101 Ohio App. 209, 136 N.E.2d 363 (1956), the Court applied the six-year statute of limitations to a suit for an alleged breach of contract warranting good workmanship — the defendant allegedly failed to remove an offensive substance from brake fluid. The Court said at 213, 136 N.E.2d at 366:
The language of Section 2305.10, Revised Code, implies [sic] a positive injury to the property, not a negative contractual failure to render a product harmless.
The latter situation was the circumstance in the Farbach case.
Lastly, the Court in American Ins. Group v. McCowin, 7 Ohio App.2d 62, 218 N.E.2d 746 (1966), applied the limitation in § 2305.-07, rather than the limitation in § 2305.10, in a suit between an employer’s insurance carrier (subrogee) and an employee’s admin-istratrix because the cause of action rested upon an implied contract of indemnity pursuant to the doctrine of primary and secondary liability. The insurance company had paid damages to a third party for personal injuries sustained by that party caused by the employee’s negligent operation of an automobile.
Cf. Val Decker Packing Co. v. Corn Prods. Sales Co., 411 F.2d 850 (6th Cir. 1969) (action for breach of implied warranty of merchantability or fitness for a particular purpose pursuant to a written sales contract governed by the four-year statute of limitations specifically provided for under the Ohio Uniform Commercial Code).
Plaintiffs also argue in the alternative that the cause of action here is based upon an implied contract of indemnity, and thus the six-year limitation in § 2305.07 is applicable. Plaintiffs rely generally on this Court’s decision in Ohio Cas. Ins. Co. v. Ford Motor Co., 502 F.2d 138 (6th Cir. 1974), which was an opinion by a divided Court.
In the Ohio Casualty case plaintiff insurance company paid damages to injured third parties who had suffered personal and property damages when the brakes on the insured’s truck failed because of an alleged defect. The insurance company, as subro-gee to the rights of the insured, then sued the automobile manufacturer upon an implied contract of indemnity. The insurance company claimed that it was secondarily liable for the wrongful injuries while the automobile manufacturer was primarily liable as the party who actually created the wrong. Because the settlement payments were all made more than two years before the suit for subrogation was filed, but, with one exception, within six years of the filing of the complaint, the issue arose over what statute of limitations applied to the cause of action. This Court ruled that the real purpose of the action was “to obtain indemnification for monies paid to the injured third persons who suffered the damage” rather than “to gain compensation for personal injury or property damage.” Id. at 140. Thus the six-year limitation for contracts in § 2305.07 was held applicable “to an action for indemnification arising where a party secondarily liable has been compelled to pay damages that should have been borne by a party primarily liable . . ..” Id. at 141.
However, the situation here is different. As recognized by the District Court, plaintiffs have proceeded upon the theory of a breach of an oral bailment contract, and not as an action for indemnification. The real purpose of plaintiffs’ action was to recover for injury to personalty. Moreover there is no primary-secondary liability involved in the present case. Lloyd’s, as subrogee, has no rights greater than those of the insured, Norton-Simon and McCall. As noted by the Court in the Ohio Casualty case:
Of course, the insurance company, as subrogee, has no greater rights against Ford — no longer time in which to commence an action — than the insured would have had if he, instead of the insurance company, had- paid the claim and sued appellee for indemnification. 50 O.Jur.2d Subrogation § 26. (502 F.2d at 139)
Because Norton-Simon and McCall were limited to the two-year limitation in § 2305.10, so also was Lloyd’s.
We are of the opinion that the Supreme Court of Ohio would adhere to its decision in Andrianos, and approve the subsequent appellate decisions applying it to personal property damage. Cf. United States Fidelity & Guar. Co. v. Truck & Concrete Equip. Co., 21 Ohio St.2d 244, 257 N.E.2d 380 (1970).
For the reasons stated above, plaintiffs were barred from bringing their cause of action because of the running of the two-year statute of limitations in § 2305.10, and thus their cause of action was properly dismissed. The judgment of the District Court is affirmed.
. The syllabus in the Andrianos case, which is the law of the case in Ohio, states:
1. A special statutory provision which relates to the specific subject matter involved in litigation is controlling over a general statutory provision which might otherwise be applicable.
2. Section 11224-1, General Code, providing that an action for bodily injury shall be brought within two years after the cause thereof arose, governs all actions the real purpose of which is to recover damages for injury to the person and losses incident thereto and it makes no difference whether such action is for a breach of contract or strictly in tort. The limitation is imposed on
the cause of action and the form in which the action is brought is immaterial.
3. Where a fare-paying passenger sustains bodily injury during his transportation by a common carrier of passengers and thereafter institutes an action against the carrier to recover damages for such injury and the results thereof based on a claimed breach of the implied contract for safe carriage, the two-year limitation for bringing an action prescribed by Section 11224-1, General Code, is controlling and not the six-year limitation contained in Section 11222, General Code, relating to an action on an implied contract.
. But see Slick Airways, Inc. v. Reinert, 114 Ohio App. 124, 175 N.E.2d 844 (1961), for a case which applied the statute of limitations for a contract action wherein a tort action was possible without discussing the Andrianos decision.
See also Schiffman v. Itts, 88 Ohio Law Abs. 389, 183 N.E.2d 423 (Ohio App.1961), wherein the Court refused to apply the two-year statute of limitations under § 2305.10 in a suit for a breach of a bailment contract because the defendant never affirmatively raised the defense of the statute of limitations.
Question: From which district in the state was this case appealed?
A. Not applicable
B. Eastern
C. Western
D. Central
E. Middle
F. Southern
G. Northern
H. Whole state is one judicial district
I. Not ascertained
Answer:
|
songer_genresp1
|
C
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed respondent.
ADAIR STATE BANK, an Oklahoma Banking Corporation, Plaintiff-Appellee/Cross-Appellant, v. AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, Defendant-Appellant/Cross-Appellee. ADAIR STATE BANK, an Oklahoma Banking Corporation, Plaintiff-Appellee, v. AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, Defendant-Appellant.
Nos. 89-5194, 89-5197, 90-5153.
United States Court of Appeals, Tenth Circuit.
Nov. 25, 1991.
Thomas H. Crouch of Meagher & Geer, Minneapolis, Minn. (Thomas M. Stieber and Charles H. Becker of Meagher & Geer, Minneapolis, Minn., and Michael Hill of Sec-rest & Hill, Tulsa, Okl., with him on the briefs), for defendant-appellant/cross-ap-pellee.
Robert W. Nelson of Ramey, Nelson & Brown, Yukon, Okl. (David W. Edmonds and Brian Husted of Edmonds, Cole, Har-grave, Givens & Witzke, Oklahoma City, Okl., with him on the briefs), for plaintiff-appellee/cross-appellant.
Before McKAY, Chief Judge, LOGAN, Circuit Judge, and WINDER, District Judge.
. Honorable David K. Winder, United States District Judge for the District of Utah, sitting by designation.
McKAY, Chief Judge.
An insurer in this diversity action challenges the judgment of the United States District Court for the Northern District of Oklahoma awarding indemnity on an employee fidelity bond the insurer issued to a bank. The district court found that the bond covered the defalcation of the bank’s chairman of the board. The insured cross-appeals the judgment of the district court in favor of the insurer on its claim that the insurer breached its duty of good faith and fair dealing. Finally, the insurer appeals the amount of attorney fees awarded by the district court to the insured under the state statute. We consolidate the appeals for purposes of our review.
I.
This case arose from a check-kiting scheme perpetrated against Adair State Bank by Harold Dunham, the chairman of the bank’s board of directors, who co-owned the controlling shares of the bank’s stock and maintained a checking account there. He also maintained a checking account at the Bank of Chelsea, an affiliated bank of which he was also a co-owner.
Mr. Dunham’s scheme began in May 1985 when he wrote a $55,000 check on his Adair checking account but had insufficient funds to cover it. He instructed a bank employee to hold the check and show it on the bank’s books as a cash item. The bank honored the check, rather than returning it to the payee for insufficient funds, and Mr. Dunham’s account was not shown as overdrawn. The chairman obtained funds the next day to cover the check.
Overdrafts on Mr. Dunham’s account soon became routine at Adair State Bank. In July 1985 Mr. Dunham wrote a check in excess of $100,000 for which his account held insufficient funds. This time, however, he was unable to come up with the funds after the check was placed on the books of Adair as a cash item. Mr. Dun-ham instead deposited into his Adair account a check drawn on his account at the Bank of Chelsea, for which there were also insufficient funds. To avoid an overdraft at Chelsea, Mr. Dunham then drew another check, for which there were insufficient funds, on his Adair account and deposited that check in his Chelsea account. When that check was returned to Adair for payment, it was placed in the cash items account. From July 1985 to March 1986, Mr. Dunham engaged in this scheme repeatedly. He would write a check on his Bank of Chelsea account at the end of each month to clear the bad checks being held on Adair’s books as a cash item. The large amount would not show up on the end-of-the-month computer reports which went to the board of directors at Adair. At the beginning of each month he would cover the check he had written on his Chelsea account by writing a check on his Adair account. Hence, the last Adair check would not arrive at Adair for collection until after the end of the month, and the Chelsea check would not show up as an overdraft for review by the board of directors. By September or October his overdrafts exceeded $200,000, and by March 1986 they exceeded $500,000.
To succeed in his scheme, Mr. Dunham required the assistance of a few of Adair’s officers. The parties agree that three of the insured’s officers knew about some or all of Mr. Dunham’s scheme. In the summer of 1985, Marsha Hall, a vice president and cashier at the bank and cousin of Mr. Dunham, discovered a correlation between a list of overdrafts from Mr. Dunham’s account and an unusually high balance in the bank’s daily cash items report. She knew that Mr. Dunham had directed that the overdrafts be placed in cash items and that the checks were cleared from cash items at the end of the month. She also knew that the pattern recurred month after month. Ms. Hall questioned this practice in a conversation with Charles Floyd, the bank’s president. Mr. Floyd admitted that he had spoken about the overdraft problem with Mr. Dunham, who had assured him that he would take care of the problem in a few months. Ms. Hall never brought the issue up with Mr. Dunham himself.
Neither did Ms. Hall bring the scheme to the attention of any other directors of the insured. In her role as secretary to the board of directors, Ms. Hall helped to prepare monthly reports for the board. Whereas the cash items figure for the month’s end report was computer-generated, Ms. Hall had personal responsibility to account for all overdrafts in excess of one hundred dollars as of the last business day of each month. She verified the report for her supervisor, Barbara Rice, and prepared the minutes for and attended each board meeting. Ms. Hall testified that it was never her intent to defraud the insured and cause it to sustain a loss by not reporting Mr. Dunham’s scheme to the directors. She felt that because she had already spoken to her superiors, Mr. Floyd and Ms. Rice, she need not have done anything further. At one point, however, the bank’s president told her that if the scheme ever failed, he probably would end up in prison.
Ms. Rice, another cousin to Mr. Dunham, was the senior vice-president of Adair and manager of a branch office. As the bank’s internal control officer, she was responsible for reviewing the insured’s reports on cash items and overdrafts. She first noticed the check-kiting scheme in the summer of 1985, when she questioned Ms. Hall about a high balance in cash items. The secretary reported that the cash items were in fact Mr. Dunham’s bad checks, and that she understood that Mr. Dunham was getting a large loan to remove those items. Though the items were removed at the end of that month, Ms. Rice noticed that the cash items returned to an inordinately high figure shortly afterward. Ms. Rice finally confronted the bank’s president, Charles Floyd, about the checks, and he assured her that Mr. Dunham was obtaining a loan to take care of the matter. Ms. Rice knew that such a practice was against the bank’s procedures and the law. After several conversations with the bank’s president, and after watching the amount reported in cash items increase every month, the senior vice president spoke to Mr. Dunham when he visited the bank’s branch office. He promised that the matter would be taken care of at the end of the month and requested that she not “pull the plug.” (Record, Vol. 1, Doc. 78, Ex. Q at 37.) Ms. Rice testified that because she was wary of the relationships among the chairman of the board and the other directors, she did not bring up the scheme to any of the board members. She had reported defalcations of an earlier bank president to one of the bank’s directors, a man who was on the board during all time periods relevant here. Ms. Rice testified that she worried about her relatives inside and outside of the bank and about the effect on the family name if her cousin were exposed. However, she apparently spoke openly with persons outside of the bank concerning Mr. Dunham’s overdrafts. Ms. Rice also discussed Mr. Dun-ham’s overdrafts with fellow Adair officers Randy Abbott and Marilyn Palmer.
On the eve of the FDIC’s discovery of the scheme in March 1986, Ms. Rice sold a block of the bank’s stock. She did not tell the buyer about Mr. Dunham’s bad checks or the extent of the bank’s losses. She sold the stock at just under its quoted price. Shortly afterward, when the scheme was discovered, the stock’s value plummeted.
Charles Floyd, president of the insured and Mr. Dunham’s half-brother, discovered the scheme no later than September 1985, when he noticed a high amount in cash items. He spoke with Ms. Hall about the figure, and she revealed that the items were Mr. Dunham’s checks. The bank president had contacted Mr. Dunham on prior occasions when he noticed that Mr. Dunham was writing checks for which an insufficient fund report had been generated. Mr. Dunham had directed that the checks be placed in cash items and said that he would cover them. Mr. Floyd had written “hold” on many of the overdrafts to authorize their status as cash items. It apparently became common practice at the bank to report the overdrafts of the chairman under the cash items account. Mr. Floyd testified that until his conversation with Ms. Hall about the unexpectedly high amount in cash items in September 1985, he had assumed that Mr. Dunham was taking care of the bad checks.
When Mr. Floyd learned in September 1985 that Mr. Dunham was not covering his bad checks, he called Mr. Dunham and demanded an explanation. Mr. Dunham advised the bank’s president that he was attempting to get a loan to cover the checks. He also threatened that if Mr. Floyd did not keep quiet, he would ruin him financially. Mr. Floyd complied, at least for some time; he did not speak to any of the directors about the chairman’s scheme. He did, however, send to the insured’s co-owner and director, George Ramey, the insured’s daily statement of conditions report for the fifteenth of each month, which reflected the large amount in cash items. He did not speak directly with Mr. Ramey about Mr. Dunham’s scheme. Moreover, in July 1985 he reminded his half-brother about the impending arrival of an outside auditor so that the latter could remove his overdrafts from the cash items account at Adair.
Mr. Floyd worked only part-time at the insured during the fall of 1985 due to illness, and he left completely that winter for surgery, returning in early 1986. During his absence, he contacted a former white-collar crime investigator of the Oklahoma Bureau of Investigation concerning Mr. Dunham’s scheme. The investigator advised Mr. Floyd to make an anonymous phone call to the Oklahoma Banking Commission. Mr. Floyd called the commission and indicated that it should investigate the insured, but he did not give any specifics of Mr. Dunham’s scheme. The commission did conduct an examination of the bank and discover the high number of cash items. But the examiners did not inquire further.
Upon Mr. Floyd’s return to Adair, he discovered that Mr. Dunham’s overdrafts had reached $500,000. Mr. Floyd testified that when he confronted Mr. Dunham, the latter threatened him with financial ruin and loss of his income and livelihood if he exposed the fraudulent transactions. Mr. Floyd then sought the advice of an attorney, who counseled him to report the check-kiting scheme to the authorities. The bank president, however, did not immediately report Mr. Dunham’s scheme. He instead sought new employment at three banks, telling each that he wanted to get away from illegal acts which were occurring at Adair and in which he took no part.
Mr. Dunham’s scheme ended on March 28, 1986, when the FDIC performed an examination at the Bank of Chelsea and discovered a check drawn by Mr. Dunham on his Adair account. The check was being held as a cash item at Chelsea. Mr. Dun-ham confessed his scheme that day, but only after he and Mr. Floyd made one last attempt to cover up the scheme. When informed of the examiner’s discovery, the chairman wrote a check from his Adair account to cover the check at the Bank of Chelsea. When the examiner asked Mr. Floyd whether the check was good, the bank’s president lied and said that it was. He then borrowed money to cover the check personally and deposited it in Mr. Dunham’s account. The bank’s chairman nevertheless broke down and revealed to the examiners his entire scheme. The examiners discovered $569,000 in checks drawn on Mr. Dunham’s Adair account which were being held at Adair in cash items.
Adair State Bank had purchased from American Casualty a Bankers Blanket Bond and an Excess Bank Employee Dishonesty Blanket Bond. The insured sought indemnity under the fidelity bonds issued by American Casualty for the loss incurred as a result of Mr. Dunham’s scheme in a letter from Mr. Floyd dated March 28, 1986. The insurer denied coverage on September 19, 1986. The insurer rejected the claim on the grounds that coverage of Mr. Dunham’s activities terminated with the initial discovery of the loss by the insured’s officers Floyd, Hall, and Rice in the summer and fall of 1985. The insurer asserted that after this discovery the insured failed to give timely notice of its loss, which is a condition precedent to coverage under the policy.
The insured brought suit in state court to recover under the bonds its losses sustained by Mr. Dunham’s check-kiting scheme. The insured also sued for breach of duty of good faith and fair dealing. The insurer removed the case to the United States District Court for the Northern District of Oklahoma. The insurer filed a motion for summary judgment that raised policy defenses to coverage under the bonds and disputed the insured’s allegation of bad faith. The district court granted summary judgment in favor of the insurer on the insured’s claim of bad faith. It denied the insurer’s motion on the policy coverage, and the suit for recovery on the insurance contracts was tried to the district court on stipulated facts. The district court found that the defalcations of Mr. Dunham were covered under the fidelity bonds and entered judgment in favor of the insured on its claim of breach of contract. The insurer appeals the judgment of the district court that it breached its contract with the insured. The insured cross-appeals the district court’s summary judgment in favor of the insurer on its allegation of bad faith. Finally, the insurer contests the district court’s award of attorney fees to the insured.
II.
Interpretation of terms contained in an insurance contract are issues of law which we review de novo. See In re Ruti-Sweetwater, Inc., 836 F.2d 1263,1266 (10th Cir.1988). When a case is submitted to the district court on stipulated facts, “the ordinary standard of review still inheres: findings of the trial court are set aside only if they are clearly erroneous.” Sears v. Atchison, Topeka & Santa Fe Ry. Co., 645 F.2d 1365, 1370 (10th Cir.1981) (citation omitted), cert. denied, 456 U.S. 964, 102 S.Ct. 2045, 72 L.Ed.2d 490 (1982). We look to Oklahoma law to aid our interpretation of the fidelity bonds. Rhody v. State Farm Mut. Ins. Co., 771 F.2d 1416, 1420 (10th Cir.1985). Because the bond in question is required by statute, we review the bond in light of the statute and read its terms into the bond. Lum v. Lee Way Motor Freight, Inc., 757 P.2d 810, 816 n. 22 (Okla.1987). The Oklahoma provision, which the terms of the bond closely mirror, requires:
The directors of a bank or trust company shall require good and sufficient fidelity bonds on all active officers and employees ... which bonds shall provide for indemnity to such bank or trust company on account of any losses sustained by it as the result of any dishonest, fraudulent or criminal conduct by them acting independently or in collusion or combination with any person or persons.
Okla.Stat.Ann. tit. 6, § 713 (West 1984).
Pursuant to the Oklahoma provision, the banker’s blanket bond provides indemnity against losses caused by the dishonest or fraudulent acts of bank employees up to $300,000, with a $10,000 deductible, and an excess bond provides coverage over that amount up to $1,000,000. Both bonds afford coverage for “[l]oss resulting directly from dishonest or fraudulent acts of an Employee committed alone or in collusion with others,” subject to specified terms, conditions, limitations, and exclusions. (Record, Vol. 1, Doc. 78, Ex. G.) The bonds further define coverage of an employee’s “dishonest or fraudulent acts”:
only dishonest or fraudulent acts committed by such Employee with the manifest intent (a) to cause the Insured to sustain such loss, and (b) to obtain financial benefit for the Employee or for any other person or organization intended by the Employee to receive such benefit.
Id. The parties do not disagree that Mr. Dunham committed a dishonest or fraudulent act with the manifest intent to cause the insured to sustain a loss and to obtain financial benefit for himself. At issue are the actions of officers Floyd, Rice, and Hall.
Before we begin our analysis of the insured’s claim for breach of contract, we emphasize that the district court couched in the alternative its judgment that the insured’s loss was covered under the fidelity bonds. The district court held that because the other officers were in collusion with Mr. Dunham, their discovery would not be imputed to the insured for purposes of the bond’s requirement that the insured give notice to the insurer within thirty days of its discovering the loss. In the alternative, the district court held that officers Dun-ham, Floyd, Rice, and Hall all committed independent acts which were dishonest or fraudulent and combined to produce the loss. We need only affirm the district court on one of the two conclusions to affirm its decision. We first address the policy defenses asserted by the insurer.
A.
Coverage under both bonds is conditioned on timely notice. The bonds require the insured to give notice “[a]t the earliest practicable moment, not to exceed 30 days, after discovery of [the] loss.” (Record, Vol. 1, Doc. 78, Ex. G.) The bond further states:
Discovery occurs when the Insured becomes aware of facts which would cause a reasonable person to assume that a loss covered by the bond has been or will be incurred, even though the exact amount or details of loss may not then be known.
Id. The insured provided notice to the insurer on March 28, 1986. The insurer argues that the insured discovered the loss more than thirty days prior to that date. If, as the insurer alleges, the insured did discover its loss prior to that time, then the insured failed to comply with a condition precedent for coverage, and liability under the fidelity bonds would not accrue. See Fidelity & Deposit Co. v. United States Fidelity & Guar. Co., 179 Okl. 174, 64 P.2d 672, 674-75 (1935).
At issue under this provision is whether the knowledge of officers Floyd, Rice, and Hall may be imputed to the insured. The district court concluded, and neither party disagrees, that the officers’ knowledge is imputed to the bank unless they participated in the wrongdoing that caused the loss. See Alfalfa Elec. Coop., Inc. v. Travelers Indem. Co., 376 F.Supp. 901, 907 (W.D.Okla.1973). We focus on whether the action or inaction of the officers at issue is sufficient to characterize them as “participants” in Mr. Dunham’s scheme.
We initially examine the actions of Mr. Floyd, the president of the bank. As the insured makes clear, Mr. Floyd’s action included honoring checks for which there were insufficient funds and complying with his half-brother’s request to place overdrafts on his account in cash items. Mr. Floyd’s “participation” was essential for Mr. Dunham’s scheme to work. See First Nat’l Bank v. Fidelity and Casualty Co., 634 F.2d 1000 (5th Cir.1981) (allegation of conspiracy to defraud through a forgery and check-kiting scheme perpetrated by director and “facilitated” by bank president, if true, asserts claim under employee fidelity bond); cf. Federal Deposit Ins. Corp. v. National Sur. Corp., 281 N.W.2d 816 (Iowa 1979) (bank president whose conduct included holding overdrafts as cash items committed dishonest and fraudulent acts); National Newark and Essex Bank v. American Ins. Co., 76 N.J. 64, 385 A.2d 1216 (1978) (repeated approval of unauthorized loans so that customer could cover overdrafts was dishonest and fraudulent). Mr. Floyd’s anonymous request for an investigation of the bank does not mitigate his participation — he only attempted to escape blame by such action when it was clear that the overdrafts would eventually be discovered. Moreover, Mr. Floyd attempted to conceal Mr. Dunham’s dishonesty until the very end, when he borrowed money to place in Mr. Dunham’s account so that investigators would not uncover the check-kiting scheme. Mr. Floyd clearly put the interest of his half-brother above those of his employer.
This court cannot ignore the action, and at times inaction, of Ms. Rice. Without aid from the person responsible for the insured’s internal control, Mr. Dunham’s scheme would have failed. Ms. Rice was directly responsible for overseeing the operation of the bank so that schemes like Mr. Dunham’s would not occur. In fact, she had reported the defalcation of a prior president of the bank to a director before Mr. Dunham and his partner acquired a controlling interest in the insured. Yet in this case, Ms. Rice submitted to the board of directors reports which she knew hid damning facts of what had transpired during the preceding month. Courts in other circuits have found similar behavior to be dishonest and fraudulent. Federal Deposit Ins. Corp. v. Aetna Casualty and Sur. Co., 426 F.2d 729, 737 (5th Cir.1970) (“[B]oth misrepresentation and deliberate deception by pretense and stealth constitute dishonest and fraudulent conduct.”) (citations omitted); Citizens State Bank v. Transamerica Ins. Co., 452 F.2d 199, 203 (7th Cir.1971) (same). Even when it was clear that her cousin could not pay the overdrafts and it was only a matter of time before the scheme would be discovered, she sold her shares in the insured rather than report Mr. Dunham’s fraudulent actions. She kept her word and did not “pull the plug” on Mr. Dunham, and in doing so she breached a duty she owed to the bank. We believe Ms. Rice’s conduct sufficiently constituted “participation” in the scheme to preclude her knowledge from being imputed to the bank under Oklahoma law. She believed that it was in her best interest to conceal from her employer information which adversely affected its well-being. The doctrine of imputation therefore does not apply. See Puget Sound Nat’l Bank v. St. Paul Fire and Marine Ins. Co., 32 Wash.App. 32, 645 P.2d 1122, 1127 (1982) (examining imputation doctrine and agency rules).
Ms. Hall’s behavior, as the insured’s secretary and cashier, is very troubling. As the insurer points out, she had no conversation with Mr. Dunham concerning his overdrafts. She also indicated in her testimony that she had no fraudulent motive for her silence. The insurer therefore argues that, at worst, Ms. Hall’s actions constituted negligence with no motive to participate in the scheme. We nevertheless believe that her conduct amounted to more than gross negligence or poor judgment. The district court correctly concluded from the stipulated facts that Ms. Hall was a “participant” in Mr. Dunham’s scheme. As with the assistance of Mr. Floyd and Ms. Rice, Mr. Dunham’s scheme would have failed without the assistance of Ms. Hall. She was responsible for preparing reports submitted to the board of directors, and she never reported the clear abuse by Mr. Dun-ham. She followed Mr. Floyd’s directions to hold the overdrafts in cash items. This action, which violated bank policy, and her preparation of reports which failed to detail Mr. Dunham's exorbitant overdrafts, are sufficient facts to support the district court’s conclusion that Ms. Hall was a participant in Mr. Dunham’s scheme. Cf. National Bank of Pakistan v. Basham, 142 A.D.2d 532, 531 N.Y.S.2d 250 (1988), aff'd, 73 N.Y.2d 1000, 541 N.Y.S.2d 345, 539 N.E.2d 101 (1989) (bank employee who intentionally chose not to debit account for dishonest checks and instead debited frozen account committed dishonest or fraudulent act with manifest intent to cause employee a loss); compare Federal Deposit Ins. Corp. v. St. Paul Fire and Marine Ins. Co., 942 F.2d 1032 (6th Cir.1991), and cases cited therein (officer did not have manifest intent to cause employer injury because evidence demonstrated intent to benefit the insured).
In order for the scheme to succeed, it was necessary for each of the officers to perform certain actions and also remain silent in the face of their professional duty to report certain information to the board of directors. All three officers were repeatedly called upon to choose between the interests of the bank and the interests of Mr. Dunham. Each time, they chose to promote the welfare of Mr. Dunham to the detriment of their employer. The district court was not clearly erroneous when it concluded that officers Floyd, Hall, and Rice were participants in Mr. Dunham’s check-kiting scheme. Their discovery of Mr. Dunham’s dishonesty, therefore, should not be imputed to the insured. See Aetna Casualty, 426 F.2d at 739 (knowledge of defalcator “and the directors associated with him cannot be imputed to the Bank since they were acting adversely to its interests.”). The proper date of discovery is therefore the date when the FDIC examiners reported Mr. Dunham’s defalcations to the board of directors.
B.
The insurer next argues that coverage for losses due to Mr. Dunham’s defalcations ended once officers Floyd, Hall, and Rice knew of his dishonesty, and thus that insurer need not recompense the bank for losses subsequent to this time. The bond provision at issue states in relevant part:
This bond shall be deemed terminated or canceled as to any Employee or any partner, officer or employee of any Processor — (a) as soon as any Insured, or any director or officer not in collusion with such person, shall learn of any dishonest or fraudulent act committed by such person at any time against the insured or any other person or entity.
(Record, Vol. 1, Doc. 78, Ex. G.)
The district court found that discovery of the scheme by officers Floyd, Rice, and Hall did not terminate the policy. Because the officers were in “collusion” with Mr. Dunham, the district court reasoned that the termination provision was never triggered. We address the meaning of “collusion” under the policy.
Absent a definition in the policy, we are to discern the plain and ordinary meaning of a term. Okla.Stat.Ann. tit. 15, § 160 (West 1966); Continental Oil Co. v. National Fire Ins. Co., 541 P.2d 1315, 1320 (Okla.1975). We therefore look to the meaning of “collusion” in its ordinary and popular sense, keeping in mind each clause of the contract to aid our interpretation. Okla.Stat.Ann. tit. 15, § 157 (West 1966).
The district court, searching for a popular definition of “collusion,” cited the following definition from Black’s Law Dictionary:
An agreement between two or more persons to defraud a person of his rights by the forms of law, or to obtain an object forbidden by law. It implies the existence of fraud of some kind, the employment of fraudulent means, or of lawful means for the accomplishment of an unlawful purpose____ A secret combination, conspiracy, or concert of action between two or more persons for fraudulent or deceitful purpose.
Black’s Law Dictionary 240 (5th ed. 1979) (citation omitted). The district court then concluded that officers Floyd, Hall, and Rice were aware of what each knew and what each was doing. The court concluded that they secretly participated toward the same unlawful purpose of concealing Mr. Dunham’s activities.
Neither party disagrees with the district court’s definition of “collusion,” but the insurer takes issue with how the district court applied the term to Ms. Hall’s activities. The insurer explains that when Ms. Hall learned of Mr. Dunham’s dishonest and fraudulent acts, she did not have a secret agreement with him to further the scheme. It emphasizes Ms. Hall’s assertion that she never spoke with Mr. Dunham concerning his overdrafts. The insurer complains that Ms. Hall remained silent not because she was a co-conspirator who intended to defraud the bank, but because she believed that she did not need to speak to anyone other than her superiors.
We do not construe Ms. Hall’s silence so benignly. The district court found, and we agree, that Ms. Hall’s tender to the board of directors of a month-end report which completely concealed the activities of its chairman was sufficient action to be fraudulent. Ms. Hall’s silence, though perhaps understandable given her familial relationship with Mr. Dunham, is nonetheless sufficient for us to uphold the district court’s finding that she was in “collusion” with the bank chairman. In reaching this decision, we also note Ms. Hall’s involvement with holding the overdrafts in cash items.
The insurer next argues that the bond’s coverage terminated when one of the officers first discovered Mr. Dunham’s dishonest acts. At the time of discovery, the insurer contends, the officers were not in collusion with Mr. Dunham, and any subsequent collusion does not negate the termination clause. This analysis would invoke the termination clause during the window of time between discovery and the officers’ decision to hide Mr. Dunham’s dishonest and illegal action from the board of directors.
We reject the insurer’s interpretation of the provision as inconsistent with the intent of the Oklahoma statute requiring a bank or trust to insure the fidelity of its officers and employees. Such an interpretation would effectively limit the definition of collusion to preexisting agreements to defraud the bank. For example, the bond under this interpretation would not apply to an employee who discovered a co-worker’s defalcation and then used blackmail to acquire some of the illegally obtained funds. We do not believe that the Oklahoma legislature intended to immunize the insurer from liability once one dishonest employee discovers the dishonesty of another. The intent of the termination provision clearly is to encourage the insured to release dishonest employees. See Alfalfa, 376 F.Supp. at 912 (“[I]t has been held to be a breach of good faith to maintain the agent in a position of trust after discovering his defalcations without notifying the fidelity carrier and giving it an opportunity to decide whether or not it desires to continue as insurer.”) (citations omitted). In this case, where the insured never had the knowledge or the opportunity to release any of the officers from its employ, the termination clause did not take effect at the time argued by the insurer.
We agree with the district court’s finding that (1) the insured provided timely notice of its loss to the insurer, and (2) the termination clause was not triggered when other officers discovered Mr. Dunham’s scheme. Because we agree with the district court that the policy defenses asserted by the insurer were not applicable, we need not reach the alternative holding that each officer committed a fraudulent or dishonest act with the manifest intent to cause loss to the insured.
III.
The insured cross-appeals the district court’s summary judgment on its claim alleging bad faith by the insurer. The insured finds fault with the insurer’s failure to investigate the case thoroughly, alleging that the insurer failed to inquire fully into facts which might have supported coverage. The argument rests substantially on two assertions: first, that the insurer’s very structure for claims management predisposes it to deny coverage, and second, that the insurer’s investigation of this claim was inadequate.
We review a grant of summary judgment under the same standard as the trial court. Summary judgment may be granted only if there is no genuine issue of material fact, and all evidence must be viewed in a light most favorable to the party opposing the motion. Osgood v. State Farm Mut. Auto. Ins. Co., 848 F.2d 141, 143 (10th Cir.1988).
Oklahoma tort law recognizes “a cause of action ... against an insurer for a bad faith refusal to compensate
Question: What is the nature of the first listed respondent?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_respond1_7_2
|
C
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine the gender of this litigant. Use names to classify the party's sex only if there is little ambiguity (e.g., the sex of "Chris" should be coded as "not ascertained").
James C. HADSELL, Plaintiff-Appellee, v. Larry H. HOOVER, Defendant-Appellant. Computronic Industries Corporation et al., Defendants.
No. 73-1110.
United States Court of Appeals, Tenth Circuit.
Argued and Submitted Aug. 13, 1973.
Decided Sept. 13, 1973.
William R. Fishman, Denver, Colo., for plaintiff-appellee.
James W. Heyer, Lakewood, Colo., for defendant-appellant.
Before LEWIS, BARNES and MC-WILLIAMS, Circuit Judges.
Honorable Stanley N. Barnes of the Ninth Circuit, sitting by designation.
BARNES, Circuit Judge:
This appeal is from a judgment entered upon a jury verdict against appellant and others for fraud under the federal securities laws. Plaintiff-appellee, Hadsell, filed his complaint in the United States District Court for the District of Colorado, alleging, inter alia, conduct in violation of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j, 48 Stat. 891, and Rule 10b-5, 17 C.F.R. § 240.10b-5, implemented thereunder; and Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q, 48 Stat. 84. Only defendant-appellant Hoover, one of several defendants who received the adverse judgment in the matter below, has appealed. Our jurisdiction rests in 28 U.S.C. § 1291.
At all material times, Hoover was president of Western General Corporation (herein Western General or Western), a New York corporation with offices in Denver, Colorado. Western was a holding company with assets consisting of securities and real estate investments, most of them pledged or mortgaged. Through Hoover, Western solicited operating funds from Hadsell. Hadsell refused an offer to loan Western money, but agreed to purchase unregistered stock held by Western in General Energy Corporation (herein General Energy). Thirty thousand shares of General Energy were sold to Hadsell for $75,000 through two transactions: twenty thousand shares were sold on December 11, 1968, and an additional ten thousand shares were sold on January 11, 1969. The price per share each time was $2.50 per share. The alleged fraud occurred with respect to these two transactions.
The following material evidence was admitted at trial in support of a finding of fraud:
(1) Western General’s repurchase agreement, (Plaintiff’s Ex. 3):
Western agreed to repurchase the General Energy stock from Hadsell one year from the date of sale (December 11, 1969) at a price of $3.50 per share. At the time of the sale to Hadsell, registered shares were traded over the counter at $6.00. The shares which Hadsell purchased, however, were unregistered and could not have been sold over the counter at any price. Hadsell knew this, and therefore it seems obvious to us that he primarily relied upon the repurchase agreement in making his purchases. Subsequent to the purchase, both Western and General Energy became insolvent; the shares were worthless and Western was unable to repurchase. (Hadsell still has the stock; he has made no efforts to register it so as to effect a secondary sale.)
(2) Western General’s financial statement:
Prior to the purchases, Hoover showed Hadsell a financial statement purportedly showing the net worth of Western General as of September 30, 1968, and discussed the statement in detail with him. It, and he, indicated that Western General was worth “substantially more” than $3,000,000 (R.T. at 27), and that “all its companies were operating at a profit” (R.T. at 29). At trial, Hadsell proved that Western General, in the fall of 1968, and on or about September 30, 1968, had operating expenses of $3,000 per month, but no income; was some $3,200,000 in debt, and had current liabilities (due in one year) of $309,000 (R.T. at 133). It had overdue or pressing lease obligations with respect to certain of its real estate investments. None of this was told Hadsell. No profit and loss statement was shown Hadsell (R.T. at 109). Hadsell necessarily relied upon the financial stability of Western General if he relied upon its repurchase agreement in making the stock purchases of General Energy.
(3) Material misstatements or omissions :
The following misstatements or omissions were made incident to the sale of the General Energy stock:
(a) The accountant who prepared the financial statement of Western General as of September 30, 1968, (Ex. 1), issued a “qualification letter” (Ex. 2) which became a part of the statement (R.T. at 181-82), to the effect that he could not verify assets and accounts receivable, nor could he verify the value of the assets included in the statement. Hoover had received the letter prior to his discussion with Hadsell, but there is no indication in the record that he showed the letter to Hadsell nor that he mentioned it to him.
(b) In discussing the financial statement with Hadsell, Hoover represented that the listed assets were worth more than they were indicated on the statement. (R.T. at 27).
(c) Hoover failed to indicate that Western General was planning to liquidate some of its assets to pay off debts.
(d) Hadsell was not informed that certain parties would receivS commissions for obtaining the General Energy stock sale to Hadsell, and that the commissions would be taken from the receipts of the transactions. (R.T. at 38).
(4) Computronic Industries:
Computronic Industries Corporation (herein Computronic), is a corporation whose stock was traded over the counter. After the sale of General Energy stock to Hadsell, Western General encountered further financial difficulties. An arrangement was made (Ex. 9) whereby almost all Western General’s assets were transferred to- Computronic.
Hadsell was not informed by Western General of the transfer of its assets. Western General retained the obligation to Hadsell, however, together with other liabilities and some “three to four hundred thousand shares of Computronic stock.” (R.T. at 146).
Hadsell learned of this, and his attorney made demand upon Computronic to assume Western General’s obligation to Hadsell under the repurchase agreement. Computronic agreed, and assumed the obligation. Hadsell was then shown two financial statements indicating the net worth of Computronic as of August 31, 1969; one was audited and indicated a net worth of $4,894,273, the second was unaudited and indicated a net worth of $5,334,622.13. It was signed by Mr. Hoover (Ex. 10). The audited statement was later withdrawn because the Securities and Exchange Commission objected to a lack of proof of the value of the underlying assets. At the time of trial, Computronic was insolvent.
(5) Promissory notes:
Computronic assumed the Western General obligation to repurchase the General Energy stock from Hadsell by executing three promissory notes for a total amount of $115,400, $10,400 more than the original repurchase agreement called for. The notes were issued on January 15, 1970, and were due in 75 days. Computronic retained the option to make payment by delivery of certain irrevocable letters of credit on the Bank of Asia, Bangkok, Thailand. Hadsell did not receive payment of the notes, either in the form of cash, or letters of credit.
The matter was tried before a jury and a judgment was entered upon a verdict against Hoover and three other defendants.- Following the verdict, the defendants unsuccessfully moved for a judgment notwithstanding the verdict.
On appeal, Hoover does “. . . not contest the credibility or sufficiency of the evidence . . .” (Appellant’s Brief at 5.) He does not deny that when there is conflicting testimony, “the resolution of the jury is conclusive”. (id.) Rather, he argues that Hadsell does not have a cause of action pursuant to the federal securities laws. At best, Hoover maintains there exists only an action for breach of contract with respect to the repurchase agreement. He also argues that “[tjhere was no fraud in connection with the purchase of securities involved here. The purity of that sale was unsullied.” (Appellant’s Brief at 16.)
This argument, however, is in direct conflict with Hoover’s statement that he does not contest the credibility or sufficiency of the evidence. We do not find it necessary to determine which position Hoover intends to rely upon, because we find that there was sufficient substantial evidence to warrant a jury in finding a scheme to defraud. It did so. We therefore confine our analysis to the question of whether Hadsell made out an actionable claim under the federal securities laws, or whether his only remedy was a common law claim for breach of contract.
Hoover relies upon Seward v. Hammond, 8 F.R.D. 457 (D.C.Mass.1948), where a district court held that a failure to perform under an agreement in which the plaintiff was to induce another to sell stock in return for the defendant’s payment of money was not a securities fraud, but a breach of contract. Cf. Fuller v. F. I. Dupont, Glore, Forgan & Co., 54 F.R.D. 557 (D.C.Mo.1971). In Richardson v. MacArthur, 451 F.2d 35 (10th Cir. 1971), this court announced the rule for determining whether a claim is one actionable under the federal securities laws or under common law contract.
“In short, whether the failure to follow through on an agreement to purchase or sell stock is a mere breach of a contract or whether it amounts to a manipulative or deceptive device, or a contrivance in contravention of § 10(b) depends upon the facts and circumstances developed at trial.” (Footnotes omitted.) Richardson v. MacArthur, supra, at 40. Cf. also: Brod v. Perlow, 375 F.2d 393 (2nd Cir. 1967); Allico v. Amalgamated, 397 F.2d 727 (7th Cir. 1968).
As Judge Hill stated in 1965, a wide and broad interpretation of the law is required by the definitions in the federal law as to what is a “purchase”, a “sale”, or a “security”.
“It is not necessary to allege or prove common law fraud to make out a ease under the statute and rule (Xb-5). It is only necessary to prove one of the prohibited actions such as the material' misstatement of fact or omission to state a material fact.” Stevens v. Vowell, 343 F.2d 374, 379 (10th Cir. 1965).
Immediately before the last statement quoted, this circuit held that the rule makes it unlawful to
“. . . Employ any device, scheme or artifice to defraud; make any untrue statement of a material fact or* to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person. The validity of this rule has been upheld as a lawful exercise of the Commission’s power. Hooper v. Mountain States Securities Corporation, 5th Cir., 282 F.2d 195, cert, denied, 365 U.S. 814, [81 S.Ct. 695, 5 L.Ed.2d 693]. . . .” (id. at 379.)
And the same opinion holds that proof of but one prohibited action (such as a material misstatement, or the omission to state a material fact) makes out a case, citing three Ninth Circuit cases.
When we consider the broad remedial policies of the federal securities laws advocated and advanced by our Supreme Court (J. I. Case v. Borak, 377 U.S. 426, 431-432, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964), and SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 195, 84 S.Ct. 275, 11 L.Ed.2d 237 (1963)) such policies are best served by such pronouncements as those already enunciated by this circuit, and as quoted above, we have no difficulty in holding that common law breach of contract relief cannot be plaintiff’s only remedy below. See also: Mitchell v. Texas Gulf Sulphur Co., 446 F.2d 90, 96-99 (10th Cir. 1971), cert, denied, 404 U.S. 1004, 92 S.Ct. 564, 30 L.Ed.2d 558 (1971).
Upon the record, we find that the facts and circumstances developed at trial were clearly sufficient to indicate a scheme to defraud within the meaning of Section 10(b) of the Securities and Exchange Act of 1934.
For these reasons, the judgment of the district court entered upon a verdict against Hoover and for Hadsell is affirmed.
. The briefs are not clear on this issue. Both parties agree on the fact that all or most all the assets were transferred by Western General to Computronic, and the record so states (R.T. at 148), but the method whereby this was effected is not indicated. We conclude that Western General received 5,000,000 shares of Computronic stock in return for most of its assets.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". What is the gender of this litigant?Use names to classify the party's sex only if there is little ambiguity.
A. not ascertained
B. male - indication in opinion (e.g., use of masculine pronoun)
C. male - assumed because of name
D. female - indication in opinion of gender
E. female - assumed because of name
Answer:
|
songer_numresp
|
1
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Your specific task is to determine the total number of respondents in the case. If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
TOWN OF SUMMERSVILLE, WEST VIRGINIA, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Friends of the Earth, Intervenor.
No. 84-1517.
United States Court of Appeals, District of Columbia Circuit.
Argued Oct. 10, 1985.
Decided Jan. 10, 1986.
George F. Bruder, Washington, D.C., for petitioner.
Andrea Wolfman, Washington, D.C., for respondent. Jerome M. Feit, Sol. and John N. Estes, III, Atty., F.E.R.C., Washington, D.C., were on the brief for respondent.
Paula Dinerstein, Washington, D.C., for intervenor, Friends of the Earth.
Before WALD, GINSBURG and BORK, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
WALD, Circuit Judge:
This case represents a highwater mark in misunderstanding between a municipal applicant for a license for a hydroelectric dam and the Federal Energy Regulatory Commission (FERC or the Commission). The Town of Summersville, West Virginia (Summersville) challenges FERC’s dismissal of Summersville’s application for a license to develop a hydroelectric project on the Gauley River in West Virginia, a river presently under consideration for inclusion in the national wild and scenic rivers system. Although FERC is statutorily barred from licensing any hydroelectric project on the Gauley River until at least 1987, Sum-mersville maintains that FERC acted arbitrarily and capriciously in refusing to hold its application in abeyance. Because we find that FERC neither had a prior policy of holding all such license applications in abeyance nor was required by statute or reason to do so in this case, we uphold its order dismissing Summersville’s license application.
I. The Statutory Background
Part I of the Federal Power Act authorizes FERC to license the construction and operation of nonfederal hydroelectric power facilities. 16 U.S.C. § 797(e). Prior to licensing, FERC may issue a preliminary permit for the study of a potential hydroelectric project site for a period not to exceed three years. 16 U.S.C. §§ 797(f), 798. The preliminary permit confers upon the permit holder a “priority of application” against potential competitors who might otherwise file a license application before the permittee can assess the feasibility of developing the chosen site.
The grant of a preliminary permit also gives the permittee certain advantages in the competitive proceedings at the licensing stage. Under the Commission’s regulations, the holder of a preliminary permit will prevail over any competing license applicant, so long as the permittee’s plans are “at least as well adapted” to the development of the project as those of its competitors. 18 C.F.R. § 4.33(h)(1) (1984). And even if a competitor presents a superior plan, FERC will give the permittee an opportunity to revise its own plan to bring it up to the level of the competitor’s plan. 18 C.F.R. § 4.33(h)(2) (1984).
The Wild and Scenic Rivers Act (WSRA) limits FERC’s authority to issue licenses under the Federal Power Act. See 16 U.S.C. §§ 1271-1287. In the WSRA, Congress has designated over fifty rivers as components of the national “wild and scenic rivers system,” 16 U.S.C. § 1274, and barred the Commission from licensing the construction of any hydroelectric project “on or directly affecting” any river within that system, 16 U.S.C. § 1278(a). The WSRA also provides that Congress may authorize the Secretary of Interior or the Secretary of Agriculture to study additional rivers for inclusion in the wild and scenic rivers system. After such a study, the Secretary submits a report, along with comments by other federal agencies and by state governors, to the President, who in turn makes a recommendation to Congress. The Congress then decides whether or not to designate the “study river” as a wild and scenic river. See 16 U.S.C. § 1275.
In order to preserve rivers in their natural state until Congress can decide whether to designate them as wild and scenic rivers, the WSRA prohibits FERC from licensing any power project construction “on or directly affecting” any study river. This licensing ban lasts for three years following Congress’ designation of a river for study, unless Congress specifically provides an even longer period. An additional moratorium period, not to exceed three years, is then provided to permit Congress to consider any report submitted by the President. 16 U.S.C. § 1278(b).
II. The Proceedings Before the Commission
The present case flows from Summers-ville’s efforts to obtain a license for a hydroelectric project on the Gauley River in West Virginia. In 1978, Congress authorized a study of the Gauley for possible inclusion in the wild and scenic rivers system. 16 U.S.C. § 1276(a)(74). Congress provided that the President’s report must be submitted to Congress by September of 1984. See 16 U.S.C. § 1276(b)(3).
In September of 1980, Summersville applied for a preliminary permit to study further development of the hydroelectric potential of the existing Summersville Dam on the Gauley River. Although Summers-ville did not originally inform FERC that the Gauley was a “study river,” within a month of its original filing, the town submitted an exhibit to its application declaring that the project site was “included in a study of the Gauley River for possible designation as a wild and scenic river under the Wilderness Act.” J.A. at 265. The Commission issued Summersville a two-year permit in May of 1981. When Sum-mersville filed a license application in November of 1982, it again informed the Commission that its project was located on a study river. Summersville revised its license application on June 27, 1983 to reflect the fact that a draft report by the Secretary of Interior did not recommend designation of the Gauley as a wild and scenic river. J.A. at 81. The Commission soon thereafter accepted for filing and began to process Summersville’s license application. The Commission’s letter of August 17, 1983 accepting the application asked Summersville to perform a cultural resource survey.
The Department of Interior submitted comments to FERC on Summersville’s license application on January 16, 1984. Interior informed the Commission that “at present, FERC is prohibited by law from licensing any project on the Gauley River” because of the river’s status as a potential wild and scenic river. J.A. at 168. The Commission received a competing license application in March of 1984 from Southeastern Renewable Resources, Inc. Two months later FERC dismissed both Sum-mersville’s and Southeastern’s license applications as premature. FERC’s original order dismissing the license applications explained that the statutory scheme of the WSRA vests the Secretary of Interior or Agriculture, depending on which department is administering the river, with the responsibility for determining whether a proposed project is consistent with the WSRA. As the Secretary of Interior had notified FERC that Summersville’s project was on a study river, FERC was “precluded by law from considering license proposals for the site.” Town of Summersville, 27 F.E.R.C. ¶ 61,206, at p. 61,402 (1984).
FERC’s Order Denying Rehearing stated:
Once it has been determined by an administering Secretary that a project is “on or directly affecting” a designated component of the [wild and scenic rivers] System or a study river, our jurisdiction to grant a license for the project is removed. While it is true that our jurisdiction to license projects on a particular study river may be reinstated should the Congress fail to make it a component of the System within a specified time period, nothing in the [WSRA] requires the Commission in the meantime to keep on file applications to develop projects on a study river. On the contrary, we conclude that the proper disposition of such applications is that they be dismissed as premature.
Town of Summersville, 28 F.E.R.C. ¶ 61,257, at p. 61,484 (1984).
The Commission rejected Summersville’s contention that it had relied on FERC’s issuance of a preliminary permit and its acceptance of Summersville’s license application as proof of a policy allowing FERC to consider its license application despite the Gauley’s status as a study river. The Commission stated that Summersville should have known that FERC lacked authority to license a project on a study river. According to FERC’s opinion, its acceptance of Summersville’s license application indicated only that the determination of whether the project would be “on or directly affecting” the Gauley River had not yet been made. Once the Secretary of Interior made that determination, FERC was entitled to dismiss Summersville’s license application.
Summersville now petitions this court to set aside the Commission’s orders as arbitrary and capricious. According to Sum-mersville, FERC must hold in abeyance Summersville’s license application until the status of the Gauley River has been conclusively determined by Congress. Summers-ville finds this obligation in FERC’s issuance of a preliminary permit and its acceptance and processing of a license application for a project on a river whose study period it knew might run until 1987. Petitioner’s core argument is that the Commission has departed from its past policy of holding in abeyance license applications on study rivers and is now retroactively applying new policies to Summersville. We find that these contentions do not hold water.
III. Analysis
A. FERC’s Purported Departure from Past Policy
Summersville’s principal argument presupposes an explicit FERC policy of entertaining license applications on study rivers. Because we conclude that FERC had no such policy, we reject Summersville’s argument that summary rejection of its license application constituted an unacknowledged and unreasoned departure from past commission policy.
Although Summersville can point to no prior FERC decisions holding license applications on study rivers in abeyance, Sum-mersville argues that such a policy is implicit in FERC’s decisions granting preliminary permits for projects on study rivers. For support, Summersville relies primarily on City of Delta, 4 F.E.R.C. II 61,102 (1978), in which the Commission granted an application for a preliminary permit for a project on the Gunnison River. At the time FERC issued the permit, Congress had already directed the Secretary of Interior to prepare a report on the Gunnison by October of 1979. See 16 U.S.C. § 1276(a)(39), (b)(1). The Commission must have known, therefore, that Congress had until October of 1982 to consider the report. Because the three-year permit issued in City of Delta would expire a year ahead of that date, Summersville argues that FERC must have intended to keep the City of Delta’s license application on file until the end of the statutorily provided study period. Otherwise, a preliminary permit on the study river would confer no meaningful “priority of application.” To avoid rendering preliminary permits in such situations illusory, Summersville asks this court to find that FERC must have had an implicit policy of holding license applications on study rivers in abeyance.
Summersville’s reading of City of Delta is overflowing. It erroneously assumes that a preliminary permit on a study river can never develop into a license application capable of being processed under the Commission’s standard timetable. Summers-ville’s argument reflects too stagnant a view cf. the licensing process under the Federal Power Act — that all conditions at the preliminary permit stage will remain unchanged at the licensing stage. It overlooks crucial distinctions between the preliminary permit and license application stages of FERC’s licensing process. A preliminary permit is issued to enable a per-mittee to study an inchoate proposal that may be licensed in the future. A license application, on the other hand, is an assessment of the present legality and feasibility of a definite project.
Critical alterations in course may develop so as to allow licensing of a project on a study river at the end of the preliminary permit period. First, the study status of a river may change in the intervening time period. Alternatively, the permittee, after collecting further information, may modify his proposed project design so that it is no longer “on or directly affecting” a river that continues to be a study river. FERC’s licensing process has always anticipated such evolutions. Since, then, a final project might be licensed without the need for any abeyance period, we decline to read into FERC’s policy of granting preliminary permits on study rivers an automatic policy of license application abeyances.
1. Potential Change in “Study Status”
The WSRA sets forth a maximum but no minimum period during which a river may remain under study. The study period, therefore, may come to a close before the maximum allowable time. This could happen (1) if the President submitted his report to Congress before his statutory deadline; (2) if the Secretary of Interior exercised his discretion under 16 U.S.C. § 1278(b)(i) to cut short the study period by recommending to Congress that the river not be included in the wild and scenic rivers system; or (3) if Congress itself took less than three years to make its final decision on a presidential recommendation.
At the preliminary permit stage, FERC does not scrutinize potential legal barriers which may arise to foreclose the issuance of a license. Unless a permanent legal barrier precludes FERC from licensing the project, FERC will issue a preliminary permit. See Woods Creek, Inc., 19 F.E.R.C. K 61,181 (1982). The Commission has issued a preliminary permit, for instance, when it knew congressional plans for federal development of the same site might well preclude private development. See City of Santa Clara, 19 F.E.R.C. U 62,363 (1982). To issue a preliminary permit on a study river without allowing for an abeyance period at the licensing stage is in no way inconsistent with the Commission’s policies.
2. Potential Change in Project Design
Summersville’s attempted equation of li-censability at the preliminary permit and license application stages also ignores another relevant fact. The project described in the license application often differs materially from the project described in the preliminary permit. At the time a preliminary permit is issued, it is quite possible that the permittee will be able to develop and submit a license application for a redesigned project that is not “on or directly affecting” the study river and that therefore need not be held in abeyance.
Summersville’s assumption that the final hydroelectric project design will be the same as the design at the preliminary permit stage disregards the basic function of preliminary permits in FERC’s power licensing scheme. The preliminary permit is actually only a minor threshold hurdle for the applicant, and the grant of a preliminary permit is in no respect an indication of the merits of a license proposal. The Commission does not hold an evidentiary hearing on the superiority, or even the feasibility, of a project at the preliminary permit stage. See, e.g., Pacific Hydro, Inc., 28 F.E.R.C. ¶ 61,014, at p. 61,027 (1984); Town of Madison Electric Works Department, 11 F.E.R.C. ¶ 61,318 (1980). To the contrary, the purpose of the preliminary permit system is solely to allow a potential applicant to develop sufficient information to prepare a complete license application and to convince FERC at the licensing stage of the effectiveness and superiority of his proposed project. Because it is specifically aimed at encouraging further study, the grant of a preliminary permit necessarily recognizes the fluidity of the permittee’s original proposal. See e.g., Town of Madison Electric Works Department, ¶ F.E.R.C. ¶ 61,318 (1980).
The inevitable uncertainties surrounding any project for which a preliminary permit has been issued — uncertainties as to the shape of the eventual proposal or even its feasibility — mean that a policy of issuing preliminary permits for projects on study rivers cannot be viewed as equivalent to or even as a predictable forerunner of a policy of entertaining license applications on study rivers. There is simply nothing in the statutory scheme or in FERC’s implementation of it to give ballast to Summers-ville’s assumption that a permit for a project on a study river will always result in a license application that cannot be processed expeditiously but must be held in abeyance until the river’s designation is finally determined.
3. Commission Resource Constraints
Constraints on agency resources also inhibit us from accepting Summersville’s reading of FERC’s preliminary permit policy as an implicit assurance that subsequent license applications will be entertained. The Commission’s policies reflect a decision to devote minimal resources to examining preliminary permit applications. Permit-tees often find after further investigation that no project at the site is feasible. Because of the high attrition rate, FERC has determined that the most efficient use of staff resources militates against any substantive investigation of legal or factual uncertainties at the preliminary permit stage. See Pacific Hydro, Inc., 28 F.E.R.C. ¶ 61,014 (1984); Consolidated Hydroelectric, Inc., 26 F.E.R.C. ¶ 61,192 (1984). We would hesitate, therefore, to mandate that a policy of issuing preliminary permits on study rivers must translate into a policy of entertaining license applications on study rivers. The Commission’s option to perform its principal screening at the licensing phase has already been upheld by this court in City of Bedford v. FERC, 718 F.2d 1164 (D.C.Cir.1983).
B. The Implications of Summersville’s Receipt of a Preliminary Permit
In light of the above discussion, we swiftly reject Summersville’s argument that FERC would never have issued it a preliminary permit if FERC had not intended to defer processing its license application until the status of the Gauley River was definitively resolved. The Commission’s present policy is apparently to issue a preliminary permit unless it would under no circumstances be able to license a project. Cf. City of Rohnert Park, 26 F.E.R.C. 1161,137 (1984) (granting preliminary permit for project on designated wild and scenic river where powerhouse might lie within protected area). From the information available at the time it issued the preliminary permit, FERC need not have concluded that no reasonable possibility existed that it would be able to license Sum-mersville’s project in 1983, when the preliminary permit expired. In its preliminary permit application, Summersville itself represented to FERC that it expected FERC’s review process to take place within 21 months after the grant of the preliminary permit. See J.A. at 12. Summersville’s representation was not obviously false: The WSRA’s moratorium on licensing projects on the Gauley River might end before 1987, or Summersville might decide to relocate its project.
While FERC’s grant of Summersville’s preliminary permit when the Gauley River’s study period could last until September of 1987 might, by itself, suggest that FERC had to contemplate the possibility or even probability of holding Summersville’s license application in abeyance, there are other relevant circumstances in the ease that vitiate such an intent. The Commission has in the past often issued permits for projects where the odds of a resulting licensable project were low, and its pronouncements consistently stress the provisional and preliminary aspect of preliminary permits. Moreover, Summersville could not reasonably have given great weight to FERC’s failure to explicitly deny that it would hold a license application in abeyance. An abeyance would have been directly contrary to FERC’s general policy of avoiding outdated or “stale” license applications as well as to the structure of the Federal Power Act. In its comments to the House Committee on Interior and Insular Affairs on the proposed Wild and Scenic Rivers Act, the Federal Power Commission (FPC, now FERC) endorsed an amendment to the bill which would have reduced the study period from five to two years whenever the FPA received a license application for a project on or affecting a study river. The purpose of the amendment (not substantially adopted) was to enable the Commission to process license applications “without any undue delay.” H.R.Rep. No. 1623, 90th Cong., 2d Sess. 52. While the FPC did not at the time elaborate on the burdens imposed by delay, FERC has since explained that:
Merely to suspend the processing for an indefinite time is not in the public interest. The data that is necessary to support an application cannot just be stored for a period of years and then simply reactivated as is. Interim changes in relevant factors such as ... project costs would have to be evaluated, and the application may require substantial revision.
Nebraska Public Power District, 10 F.E.R.C. ¶ 61,272, at p. 61,527 (1980).
A commitment to suspend processing Summersville’s license application until 1987 would in effect have extended by several years the “priority of application” conferred by Summersville’s preliminary permit. The Federal Power Act specifically states, however, that a preliminary permit is “for the sole purpose of maintaining priority of application for a license” for a period “not exceeding a total of three years.” 16 U.S.C. § 798. Although in this case the statutory purpose of fostering immediate development of the nation’s hydroelectric potential is not directly implicated since FERC may not license any project on a study river, Summersville should not have presumed that FERC would blithely ignore the clear words of its statute.
Given the existence of acceptable alternative interpretations of FERC’s grant of a preliminary permit to Summersville, and absent any positive evidence suggesting that FERC intended to commit itself to defer processing Summersville’s license application, we cannot accept Summersville’s argument that the grant of the preliminary permit represented a commitment to hold the license application in abeyance. We do, however, assume that a genuine misunderstanding between Summersville and FERC occurred. Summersville read FERC’s grant of its preliminary permit application as a broader commitment than FERC actually made. Absent some evidence that FERC’s conduct was arbitrary, capricious or an abuse of discretion, however, we can afford no relief to Summers-ville.
C. FERC’s Purported Failure to Warn
Summersville raises intertwined arguments concerning FERC’s purported failure to include appropriate warnings in Summersville’s preliminary permit. First, Summersville claims that FERC should have made clear that it would not hold Summersville’s license application in abeyance if the Gauley remained a study river. Second, Summersville asserts that FERC should have warned Summersville that its project must be redesigned so as not to be “on or directly affecting” a study river. Summersville has raised no estoppel argument but instead attempts to link these failures to warn either to an unexplained departure from agency policy or to an unjustifiable retroactive application of a new policy. We find petitioner’s contentions unpersuasive.
1. FERC’s Silence Concerning Abeyance
In light of our conclusion, see supra Part III.A, that FERC had no policy of holding in abeyance license applications on study rivers, this first prong of Summersville’s failure-to-wam argument can quickly be rejected. The burden is not on FERC to disclaim a discretionary power of abeyance not required or even specifically authorized by statute or regulation. Summersville has not shown that FERC’s actions here are in any case distinguishable from its general policy of issuing preliminary permits for projects where eventual licensability is problematic. Contrary to Siimmers-ville’s assertion, FERC need not include a warning in a permit that a project can only be licensed under certain circumstances if, as discussed below, those circumstances are clear from the words of the statute.
2. Failure to Warn that Project Must be Redesigned
Summersville raises a clearly related contention that FERC has adopted a “new” policy of including a warning in any preliminary permit to notify the permittee that any project on a study river must be redesigned so as not to be “on or directly affecting” the river. Summersville argues that the adoption of this new policy, in conjunction with the Commission’s failure to give any warning to Summersville in its preliminary permit suggests that the Commission’s policy at the time Summersville received its preliminary permit was to entertain license applications during the study period. See Town of Summersville’s Answer to Supplemental Memorandum at 4.
We find Summersville’s reliance on the so-called new “Modesto policy” misplaced.1 Section 7 of the WSRA itself provides sufficient warning that FERC would not entertain license applications on study rivers unless redesigned. The cases relied on by Summersville are not to the contrary. For example, Summersville fails to appreciate that the statement in Modesto Irrigation District, 17 F.E.R.C. ¶ 61,144 (1981), that “Modesto is on notice that the Commission is without authority to license project works ‘on or directly affecting’ ” wild and scenic rivers (emphasis supplied) is made in an order denying an appeal by an intervening party, not in the order issuing the preliminary permit to Modesto. The original grant of the preliminary permit says nothing about the effect of the WSRA. See Modesto Irrigation District, 16 F.E.R.C. ¶ 62,104 (1981). FERC’s statement that “Modesto is on notice” refers to the notice provided by the words of the statute; the grant of the preliminary permit itself gives no other warning. The preliminary permits at issue in the other cases relied on by Summersville also contain no warnings. These cases, like Modesto, involved appeals rather than original preliminary permit grants. See Capital Development Co., 25 F.E.R.C. ¶ 61,346 (1983); Oroville-Wyandotte Irrigation District, 19 F.E.R.C. ¶ 61,301 (1982). And in Modesto and Turlock Irrigation Districts, 23 F.E.R.C. ¶ 61,024 (1983), the case in which Summersville asserts that FERC first applied the “Modesto policy” to preliminary permits on study rivers, FERC merely quoted from its opinion in City of Delta, 4 F.E.R.C. ¶ 61,102 (1978) to the effect that the permittee is on notice that if the river eventually becomes a wild and scenic river FERC would be unable to license the project. Modesto and Turlock thus mandates no “new” warning.
We note finally that the express terms of Summersville’s own preliminary permit should have provided sufficient warning to Summersville. Article 7 of the permit orders that the permittee shall:
consult with the appropriate Federal, State, and local agencies ... and shall fully explore all feasible alternatives to the project and alternative project designs, taking into account impacts on natural resources and other environmental values. These resources and values include, but are not limited to: ... scenic and aesthetic values. The Permittee shall ... [study] the impact of the construction and operation of the proposed project on these natural resources and values and measures needed to protect and develop them or to provide for their mitigation or replacement, including alternative designs and operational measures ....
City of Summersville, 15 F.E.R.C. 11 62,-218, at p. 63,385 (1981) (Order Issuing Preliminary Permit), reprinted in J.A. at 21-22 (emphasis supplied). We conclude, therefore, that even if FERC has now adopted a policy of including boilerplate language in preliminary permits to the effect that projects on study rivers must be redesigned, the terms of Summersville’s own permit gave it sufficient notice that it should consider alternative project designs to avoid any impact on scenic and aesthetic values.
D. FERC’s Acceptance of Summers-ville’s License Application
Finally, FERC’s acceptance and preliminary processing of Summersville’s license application is not sufficient evidence of any general Commission policy of holding in abeyance license applications on study rivers. Summersville’s contention that FERC would not have begun to process Summersville’s license application had it not intended to hold its application in abeyance has some intuitive plausibility. FERC knew or should have known that Summers-ville’s project was located at an existing dam on a study river. FERC could therefore have referred the application immediately to the Secretary of Interior for confirmation that the project was not licensable because “on or directly affecting” a study river. That it did not do so but instead asked Summersville to prepare a cultural resource survey suggests, according to Summersville, that FERC intended at the time to hold its license application in abeyance.
This argument, unfortunately, ignores the fundamental premise of Summersville’s own license application. Summersville explicitly argued that Congress did not intend the WSRA to prohibit development at existing dams. Summersville’s original license application announces up front that its “proposed development does not conflict with the possible designation of the Gauley as a ‘Wild River.’ ” J.A. at 38. Summers-ville then proceeded to advance a project development schedule under which FERC’s approval of the license application would be completed in 1983 and construction would take place from 1984 to 1986. J.A. at 49-50. Given Summersville’s representations, we do not think FERC’s acceptance of the application indicates a commitment to keep the application on file for an indefinite period should Summersville’s assessment of the construction schedule prove false. Summersville’s abandonment of its original legal theory does not convert FERC’s acceptance of its application into a commitment to hold the application in abeyance. Summersville may well be correct that FERC erred in accepting a license application premised on an untenable legal theory. The best course may have been to summarily dismiss the license application at the outset. This court cannot conclude, however, that the remedy for the Commission’s error is to hold in abeyance an application FERC should never have accepted.
Summersville argues that in seeking early licensing it did not abandon its claim to have its application held on file. This argument misses its mark. Summersville did not abandon its claim; instead, FERC reasonably concluded that Summersville never made such a claim. We cannot fault FERC for interpreting Summersville’s license application solely as a request for immediate processing. All of Summersville’s communications to the Commission stressed a need for immediate approval of the application. See, e.g., J.A. at 70, 75-77.
Finally, the argument that FERC’s dismissal of Summersville’s license application destroyed Summersville’s valuable priority rights cannot prevail. Summersville’s preliminary permit gave it a “priority of application” statutorily limited to a period not to exceed three years. See 16 U.S.C. § 798. It consequently had no right to have its priority maintained for a longer period.
IY. Conclusion
FERC’s dismissal of Summersville’s license application as premature was consistent with past agency policy and was not arbitrary, capricious or an abuse of discretion. Accordingly, Town of Summersville’s petition for review is
Denied.
. The President did not actually forward his recommendation to Congress until April 26, 1985. This court notes but does not decide the issue of whether the three-year period for congressional consideration runs from the original due date of September 30, 1984 or from the date on which the President actually forwarded his recommendation.
. The original application was filed jointly by Summersville and Noah Corporation. To ensure that Summersville could take advantage of a municipal preference given by FERC when awarding preliminary permits, Noah and Summersville dissolved their joint venture in December of 1980, and Summersville became the sole applicant for the permit. The propriety of FERC's decision to wait until the licensing stage to determine whether the joint venture had actually been terminated was upheld by this court in City of Bedford v. FERC, 718 F.2d 1164 (D.C.Cir.1983).
. Summersville apparently confused the Wilderness Act, 16 U.S.C. §§ 1131-1136, with the Wild and Scenic Rivers Act, 16 U.S.C. §§ 1271-1287. The Wilderness Act designates certain areas within the national parks system as wilderness areas and bars any construction within such areas.
. After FERC dismissed Summersville’s license application, Summersville filed a new preliminary permit application which is presently pending before the Commission. At oral argument this court requested supplemental briefing on possible mootness and was advised that FERC has announced in writing that it will not process Summersville’s new application until this court resolves the status of the Commission's order dismissing Summersville’s original license application. In its supplemental memorandum the Commission explained that there was no guarantee that Summersville’s new permit application would result in a grant of a preliminary permit to Summersville. The memorandum also pointed out the difficulties that would arise if FERC issued a preliminary permit to a new developer only to have Summers-ville’s first license application reinstated by this court. In light of these representations, we now turn to the merits of the case before us.
. To entertain a license application on a study river requires the Commission to hold the application in an inactive status for an indefinite period since the Commission is statutorily precluded from going ahead and issuing a license for a project on a study river. See 16 U.S.C. § 1278(b).
. Issuance of a preliminary permit in City of Delta may, of course, have been a mistake. In the other FERC decisions involving a preliminary permit for a project on a study river, the study status of the river would have statutorily terminated before the end of the preliminary permit period. See, e.g., Gordon Falls Hydro Associates, 1
Question: What is the total number of respondents in the case? Answer with a number.
Answer:
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songer_pretrial
|
D
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What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the court's rulings on pre-trial procedure favor the appellant?" This includes whether or not there is a right to jury trial, whether the case should be certified as a class action, or whether a prospective party has a right to intervene in the case, but does not include rulings on motions for summary judgment. Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
Rudolph Valentino DI GIOVANNI, an infant, by his mother and next friend, Elise Heguy DiGiovanni, et al., Appellants, v. Abraham RIBICOFF, Secretary of Health, Education, and Welfare, Appellee.
No. 15842.
United States Court of Appeals District of Columbia Circuit.
Argued Jan. 18, 1961.
Decided Feb. 23, 1961.
Mr. Walter J. Murphy, Jr., Washington, D. C., with whom Mr. Samuel B. Block, Washington, D. C., was on the brief, for appellants.
Mr. Donald S. Smith, Asst. U. S. Atty., with whom Messrs. Oliver Gasch, U. S. Atty., and Carl W. Belcher, Asst. U. S. Atty., were on the brief, for appellee.
Before Edgerton, Bazelon, and Fahy, Circuit Judges.
PER CURIAM.
Beulah Countiss was divorced from Paul R. Pearson, in Virginia, on January 17, 1944. At that time a Virginia statute prohibited remarriage of either party for six months. On June 24, 1944, the prohibited period was reduced to four months by amendment and re-enactment of the statute, [Code 1919, § 5113 as amended by Acts 1944, c. 142]. Thereafter, on July 1, 1944, more than five months after the divorce decree was entered, Beulah Countiss entered into a ceremonial marriage in the District of Columbia with Pasquale DiGiovanni. In our opinion that marriage was valid because the reduction in the suspension period had freed Beulah to marry.
The parties to that marriage lived together for some years. Pasquale and the present appellant began living together in 1950 and a child was born to them in 1951. Pasquale died in 1952. Beulah was still alive. Her marriage to Pasquale was never dissolved. Pasquale was therefore incapable of marrying the appellant. Accordingly the Social Security Administration and the District Court were right in rejecting appellant’s claim to benefits as the widow of Pasquale. Their decision that an illegitimate child is not entitled to the claimed Social Security benefits is unchallenged and we do not rule upon it. 42 U.S.C.A. § 416(h) (2); D.C.Code,. Supp. VIII, 1960, § 18-716.
Affirmed.
Question: Did the court's rulings on pre-trial procedure favor the appellant? This includes whether or not there is a right to jury trial, whether the case should be certified as a class action, or whether a prospective party has a right to intervene in the case, but does not include rulings on motions for summary judgment.
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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sc_casesource
|
158
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the court whose decision the Supreme Court reviewed. If the case arose under the Supreme Court's original jurisdiction, note the source as "United States Supreme Court". If the case arose in a state court, note the source as "State Supreme Court", "State Appellate Court", or "State Trial Court". Do not code the name of the state.
DOCTOR’S ASSOCIATES, INC., et al. v. CASAROTTO et ux.
No. 95-559.
Argued April 16, 1996
Decided May 20, 1996
Ginsburg, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, O’Connor, Scalia, Kennedy, Souter, and Breyer, JJ., joined. Thomas, J., filed a dissenting opinion, post, p. 689.
Mark R. Kravitz argued the cause for petitioners. With him on the briefs were Jeffrey R. Bobbin and H. Bartow Farr III.
Lucinda A. Sikes argued the cause for respondents. With her on the brief were David C. Vladeck, Paul Alan Levy, and William C. Watt.
Briefs of amici curiae urging reversal were filed for the American Council of Life Insurance by Patricia A. Dunn, Stephen J. Goodman, and Phillip E. Stano; for the International Franchise Association et al. by William J. Fitzpatrick and John F. Verhey; and for Kaiser Foundation Health Plan, Inc., by Kennedy P. Richardson.
Deborah M. Zuckerman, Steven S. Zaleznick, and Patricia Sturdevant filed a brief for the American Association of Retired Persons et al. as amici curiae urging affirmance.
Justice Ginsburg
delivered the opinion of the Court.
This case concerns a standard form franchise agreement for the operation of a Subway sandwich shop in Montana. When a dispute arose between parties to the agreement, franchisee Paul Casarotto sued franchisor Doctor’s Associates, Inc. (DAI), and DAI’s Montana development agent, Nick Lombardi, in a Montana state court. DAI and Lombardi sought to stop the litigation pending arbitration pursuant to the arbitration clause set out on page nine of the franchise agreement.
The Federal Arbitration Act (FAA or Act) declares written provisions for arbitration “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. § 2. Montana law, however, declares an arbitration clause unenforceable unless “[n]otice that [the] contract is subject to arbitration” is “typed in underlined capital letters on the first page of the contract.” Mont. Code Ann. §27-5-114(4) (1995). The question here presented is whether Montana’s law is compatible with the federal Act. We hold that Montana’s first-page notice requirement, which governs not “any contract,” but specifically and solely contracts “subject to arbitration,” conflicts with the FAA and is therefore displaced by the federal measure.
I
Petitioner DAI is the national franchisor of Subway sandwich shops. In April 1988, DAI entered a franchise agreement with respondent Paul Casarotto, which permitted Casarotto to open a Subway shop in Great Falls, Montana. The franchise agreement stated, on page nine and in ordinary type: “Any controversy or claim arising out of or relating to this contract or the breach thereof shall be settled by Arbitration . . . .” App. 75.
In October 1992, Casarotto sued DAI and its agent, Nick Lombardi, in Montana state court, alleging state-law contract and tort claims relating to the franchise agreement. DAI demanded arbitration of those claims, and successfully moved in the Montana trial court to stay the lawsuit pending arbitration. Id., at 10-11.
The Montana Supreme Court reversed. Casarotto v. Lombardi, 268 Mont. 369, 886 P. 2d 931 (1994). That court left undisturbed the trial court’s findings that the franchise agreement fell within the scope of the FAA and covered the claims Casarotto stated against DAI and Lombardi. The Montana Supreme Court held, however, that Mont. Code Ann. §27-5-114(4) rendered the agreement’s arbitration clause unenforceable. The Montana statute provides:
“Notice that a contract is subject to arbitration . . . shall be typed in underlined capital letters on the first page of the contract; and unless such notice is displayed thereon, the contract may not be subject to arbitration.”
Notice of the arbitration clause in the franchise agreement did not appear on the first page of the contract. Nor was anything relating to the clause typed in underlined capital letters. Because the State’s statutory notice requirement had not been met, the Montana Supreme Court declared the parties’ dispute “not subject to arbitration.” 268 Mont., at 382, 886 P. 2d, at 939.
DAI and Lombardi unsuccessfully argued before the Montana Supreme Court that §27-5-114(4) was preempted by §2 of the FAA. DAI and Lombardi dominantly relied on our decisions in Southland Corp. v. Keating, 465 U. S. 1 (1984), and Perry v. Thomas, 482 U. S. 483 (1987). In Southland, we held that § 2 of the FAA applies in state as well as federal courts, see 465 U. S., at 12, and “withdraws] the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration,” id., at 10. We noted in the pathmarking South- land, decision that the FAA established a “broad principle of enforceability,” id., at 11, and that §2 of the federal Act provided for revocation of arbitration agreements only upon “grounds as exist at law or in equity for the revocation of any contract.” In Perry, we reiterated: “[S]tate law, whether of legislative or judicial origin, is applicable i/that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally. A state-law principle that takes its meaning precisely from the fact that a contract to arbitrate is at issue does not comport with [the text of §2].” 482 U. S., at 493, n. 9.
The Montana Supreme Court, however, read our decision in Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U. S. 468 (1989), as limiting the preemptive force of § 2 and correspondingly qualifying Southland and Perry. 268 Mont., at 378-381, 886 P. 2d, at 937-939. As the Montana Supreme Court comprehended Volt, the proper inquiry here should focus not on the bare words of §2, but on this question: Would the application of Montana’s notice requirement, contained in §27-5-114(4), “undermine the goals and policies of the FAA.” 268 Mont., at 381, 886 P. 2d, at 938 (internal quotation marks omitted). Section 27-5-114(4), in the Montana court’s judgment, did not undermine the goals and policies of the FAA, for the notice requirement did not preclude arbitration agreements altogether; it simply prescribed “that before arbitration agreements are enforceable, they be entered knowingly.” Id., at 381, 886 P. 2d, at 939.
DAI and Lombardi petitioned for certiorari. Last Term, we granted their petition, vacated the judgment of the Montana Supreme Court, and remanded for further consideration in light of Allied-Bruce Terminix Cos. v. Dobson, 513 U. S. 265 (1995). See 515 U. S. 1129 (1995). In Allied-Bruce, we restated what our decisions in Southland and Perry had established:
“States may regulate contracts, including arbitration clauses, under general contract law principles and they may invalidate an arbitration clause 'upon such grounds as exist at law or in equity for the revocation of any contract.’ 9 U. S. C. §2 (emphasis added). What States may not do is decide that a contract is fair enough to enforce all its basic terms (price, service, credit), but not fair enough to enforce its arbitration clause. The Act makes any such state policy unlawful, for that kind of policy would place arbitration clauses on an unequal ‘footing,’ directly contrary to the Act’s language and Congress’s intent.” 513 U. S., at 281.
On remand, without inviting or permitting further briefing or oral argument, the Montana Supreme Court adhered to its original ruling. The court stated: “After careful review, we can find nothing in the [Allied-BruceJ decision which relates to the issues presented to this Court in this case.” Casarotto v. Lombardi, 274 Mont. 3, 7, 901 R 2d 596, 598 (1995). Elaborating, the Montana court said it found “no suggestion in [Allied-Bruce] that the principles from Volt on which we relied [to uphold §27-5-114(4)] have been modified in any way.” Id., at 8, 901 P. 2d, at 598-599. We again granted certiorari, 516 U. S. 1036 (1996), and now reverse.
H-H HH
Section 2 of the FAA provides that written arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. §2 (emphasis added). Repeating our observation in Perry, the text of § 2 declares that state law may be applied “if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally.” 482 U. S., at 498, n. 9. Thus, generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements without contravening §2. See Allied-Bruce, 513 U. S., at 281; Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U. S. 477, 483-484 (1989); Shearson/American Express Inc. v. McMahon, 482 U. S. 220, 226 (1987).
Courts may not, however, invalidate arbitration agreements under state laws applicable only to arbitration provisions. See Allied-Bruce, 513 U. S., at 281; Perry, 482 U. S., at 493, n. 9. By enacting §2, we have several times said, Congress precluded States from singling out arbitration provisions for suspect status, requiring instead that such provisions be placed “upon the same footing as other contracts.” Scherk v. Alberto-Culver Co., 417 U. S. 506, 511 (1974) (internal quotation marks omitted). Montana’s §27-5-114(4) directly conflicts with § 2 of the FAA because the State’s law conditions the enforceability of arbitration agreements on compliance with a special notice requirement not applicable to contracts generally. The FAA thus displaces the Montana statute with respect to arbitration agreements covered by the Act. See 2 I. Macneil, R. Speidel, T. Stipanowich, & G. Shell, Federal Arbitration Law §19.1.1, pp. 19:4-19:5 (1995) (under Southland and Perry, “state legislation requiring greater information or choice in the making of agreements to arbitrate than in other contracts is preempted”).
The Montana Supreme Court misread our Volt decision and therefore reached a conclusion in this case at odds with our rulings. Volt involved an arbitration agreement that incorporated state procedural rules, one of which, on the facts of that case, called for arbitration to be stayed pending the resolution of a related judicial proceeding. The state rule examined in Volt determined only the efficient order of proceedings; it did not affect the enforceability of the arbitration agreement itself. We held that applying the state rule would not “undermine the goals and policies of the FA A,” 489 U. S., at 478, because the very purpose of the Act was to “ensur[e] that private agreements to arbitrate are enforced according to their terms,” id., at 479.
Applying §27-5-114(4) here, in contrast, would not enforce the arbitration clause in the contract between DAI and Casarotto; instead, Montana’s first-page notice requirement would invalidate the clause. The “goals and policies” of the FA A, this Court’s precedent indicates, are antithetical to threshold limitations placed specifically and solely on arbitration provisions. Section 2 “mandate[s] the enforcement of arbitration agreements,” Southland, 465 U. S., at 10, “save upon such grounds as exist at law or in equity for the revocation of any contract,” 9 U. S. C. §2. Section 27-5-114(4) of Montana’s law places arbitration agreements in a class apart from “any contract,” and singularly limits their validity. The State’s prescription is thus inconsonant with, and is therefore preempted by, the federal law.
* * *
For the reasons stated, the judgment of the Supreme Court of Montana is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Section 2 provides, in relevant part:
“A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9U.S.C. §2.
Dissenting Justice Gray thought it “cavalier” of her colleagues to ignore the defendants’ request for an “opportunity to brief the issues raised by the . . . remand and to present oral argument.” Casarotto v. Lombardi, 274 Mont. 3, 9-10, 901 P. 2d 596, 599-600 (1995).
At oral argument, counsel for Casarotto urged a broader view, under which §27-5-114(4) might be regarded as harmless surplus. See Tr. of Oral Arg. 29-32. Montana could have invalidated the arbitration clause in the franchise agreement under general, informed consent principles, counsel suggested. She asked us to regard §27-5-114(4) as but one illustration of a cross-the-board rule: Unexpected provisions in adhesion contracts must be conspicuous. See also Brief for Respondents 21-24. But the Montana Supreme Court announced no such sweeping rule. The court did not assert as a basis for its decision a generally applicable principle of “reasonable expectations” governing any standard form contract term. Cf. Transamerica Ins. Co. v. Royle, 202 Mont. 173, 180, 656 P. 2d 820, 824 (1983) (invalidating provision in auto insurance policy that did not “honor the reasonable expectations” of the insured). Montana’s decision trains on and upholds a particular statute, one setting out a precise, arbitration-specific limitation. We review that disposition, and no other. It bears reiteration, however, that a court may not “rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable, for this would enable the court to effect what. . . the state legislature cannot.” Perry v. Thomas, 482 U. S. 483, 493, n. 9 (1987).
Question: What is the court whose decision the Supreme Court reviewed?
001. U.S. Court of Customs and Patent Appeals
002. U.S. Court of International Trade
003. U.S. Court of Claims, Court of Federal Claims
004. U.S. Court of Military Appeals, renamed as Court of Appeals for the Armed Forces
005. U.S. Court of Military Review
006. U.S. Court of Veterans Appeals
007. U.S. Customs Court
008. U.S. Court of Appeals, Federal Circuit
009. U.S. Tax Court
010. Temporary Emergency U.S. Court of Appeals
011. U.S. Court for China
012. U.S. Consular Courts
013. U.S. Commerce Court
014. Territorial Supreme Court
015. Territorial Appellate Court
016. Territorial Trial Court
017. Emergency Court of Appeals
018. Supreme Court of the District of Columbia
019. Bankruptcy Court
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021. U.S. Court of Appeals, Second Circuit
022. U.S. Court of Appeals, Third Circuit
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024. U.S. Court of Appeals, Fifth Circuit
025. U.S. Court of Appeals, Sixth Circuit
026. U.S. Court of Appeals, Seventh Circuit
027. U.S. Court of Appeals, Eighth Circuit
028. U.S. Court of Appeals, Ninth Circuit
029. U.S. Court of Appeals, Tenth Circuit
030. U.S. Court of Appeals, Eleventh Circuit
031. U.S. Court of Appeals, District of Columbia Circuit (includes the Court of Appeals for the District of Columbia but not the District of Columbia Court of Appeals, which has local jurisdiction)
032. Alabama Middle U.S. District Court
033. Alabama Northern U.S. District Court
034. Alabama Southern U.S. District Court
035. Alaska U.S. District Court
036. Arizona U.S. District Court
037. Arkansas Eastern U.S. District Court
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045. Delaware U.S. District Court
046. District Of Columbia U.S. District Court
047. Florida Middle U.S. District Court
048. Florida Northern U.S. District Court
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143. New York U.S. District Court
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150. Norfolk U.S. District Court
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152. Kentucky U.S. Distrcrict Court
153. New Jersey U.S. District Court
154. California U.S. District Court
155. Florida U.S. District Court
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157. District of Orleans U.S. District Court
158. State Supreme Court
159. State Appellate Court
160. State Trial Court
161. Eastern Circuit (of the United States)
162. Middle Circuit (of the United States)
163. Southern Circuit (of the United States)
164. Alabama U.S. Circuit Court for (all) District(s) of Alabama
165. Arkansas U.S. Circuit Court for (all) District(s) of Arkansas
166. California U.S. Circuit for (all) District(s) of California
167. Connecticut U.S. Circuit for the District of Connecticut
168. Delaware U.S. Circuit for the District of Delaware
169. Florida U.S. Circuit for (all) District(s) of Florida
170. Georgia U.S. Circuit for (all) District(s) of Georgia
171. Illinois U.S. Circuit for (all) District(s) of Illinois
172. Indiana U.S. Circuit for (all) District(s) of Indiana
173. Iowa U.S. Circuit for (all) District(s) of Iowa
174. Kansas U.S. Circuit for the District of Kansas
175. Kentucky U.S. Circuit for (all) District(s) of Kentucky
176. Louisiana U.S. Circuit for (all) District(s) of Louisiana
177. Maine U.S. Circuit for the District of Maine
178. Maryland U.S. Circuit for the District of Maryland
179. Massachusetts U.S. Circuit for the District of Massachusetts
180. Michigan U.S. Circuit for (all) District(s) of Michigan
181. Minnesota U.S. Circuit for the District of Minnesota
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184. Nevada U.S. Circuit for the District of Nevada
185. New Hampshire U.S. Circuit for the District of New Hampshire
186. New Jersey U.S. Circuit for (all) District(s) of New Jersey
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189. Ohio U.S. Circuit for (all) District(s) of Ohio
190. Oregon U.S. Circuit for the District of Oregon
191. Pennsylvania U.S. Circuit for (all) District(s) of Pennsylvania
192. Rhode Island U.S. Circuit for the District of Rhode Island
193. South Carolina U.S. Circuit for the District of South Carolina
194. Tennessee U.S. Circuit for (all) District(s) of Tennessee
195. Texas U.S. Circuit for (all) District(s) of Texas
196. Vermont U.S. Circuit for the District of Vermont
197. Virginia U.S. Circuit for (all) District(s) of Virginia
198. West Virginia U.S. Circuit for (all) District(s) of West Virginia
199. Wisconsin U.S. Circuit for (all) District(s) of Wisconsin
200. Wyoming U.S. Circuit for the District of Wyoming
201. Circuit Court of the District of Columbia
202. Nebraska U.S. Circuit for the District of Nebraska
203. Colorado U.S. Circuit for the District of Colorado
204. Washington U.S. Circuit for (all) District(s) of Washington
205. Idaho U.S. Circuit Court for (all) District(s) of Idaho
206. Montana U.S. Circuit Court for (all) District(s) of Montana
207. Utah U.S. Circuit Court for (all) District(s) of Utah
208. South Dakota U.S. Circuit Court for (all) District(s) of South Dakota
209. North Dakota U.S. Circuit Court for (all) District(s) of North Dakota
210. Oklahoma U.S. Circuit Court for (all) District(s) of Oklahoma
211. Court of Private Land Claims
Answer:
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songer_casetyp1_6-3
|
B
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "labor relations".
GATEWAY STRUCTURES, INC., Plaintiff-Appellant, v. CARPENTERS 46 NORTHERN CALIFORNIA COUNTIES CONFERENCE BOARD OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, AFL-CIO, and Carpenters Local No. 701, Defendants-Appellees.
No. 84-1645.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Nov. 15, 1985.
Decided Dec. 26, 1985.
Spencer H. Hipp, Littler, Mendelson, Fas-tiff & Tichy, Fresno, Cal., for plaintiff-appellant.
Blythe Mickelson, Van Bourg, Allen, Weinberg & Roger, San Francisco, Cal., for defendants-appellees.
Before SNEED, KENNEDY, and BOOCHEVER, Circuit Judges.
SNEED, Circuit Judge:
This is an appeal from the district court’s enforcement of a labor arbitration award. We affirm.
I.
FACTS
This case arises from the construction in 1981-82 of a shopping center in Fresno, California. Two general contractors worked on the project, North American Investments (NAI) and Gateway Structures, Inc. (Gateway). Both of these corporations are controlled, though not wholly owned, by John Langford. NAI has never signed a labor agreement with any union. Gateway signed an agreement with the Carpenters Union (the Union) in July 1981. John Langford also signed that agreement; it is not clear whether he signed it as an individual or as a representative of Gateway. His contractor license number appears on the agreement. That agreement incorporates by reference the 1980 Master Agreement between the Northern California Contractors Council, Inc., and the Carpenters 46 Northern California Counties Conference Board of the United Brotherhood of Carpenters and Joiners (the Master Agreement).
The pension trust funds operated by the Union financed construction of Von’s Market, one of the stores in the shopping center. The terms of that financing required that Union labor be used in the construction of Von’s Market. NAI, the general contractor on the entire project, did not want to sign a labor agreement. Accordingly, it formed Gateway to build Von’s Market and to enter into an agreement with the Union.
During the same period of time, NAI also was involved in negotiations with the Union. NAI agreed to enter into a collective bargaining agreement with the Union if the Union’s pension trust funds would make a takeout (or permanent) loan on the shopping center. That financing never materialized; NAI never signed any agreement with the Union. NAI did, however, use some Union labor to construct its portion of the shopping center.
The facts out of which the grievance arose are in dispute. A few things are clear, however. Langford did not maintain a formal separation between Gateway and NAI. Trust fund contributions for employees of one company were paid by the other. Paychecks for employees of one company were written on accounts of the other company. Most importantly, employees dispatched by the Union to one company performed work for the other company.
On August 17, 1981, the Union filed a grievance against NAI and Gateway claiming that NAI and Gateway were using nonunion labor to build the shopping center. The parties admit that NAI was using nonunion labor. The Master Agreement contained a union security clause, which prohibits employers bound by the agreement from using nonunion labor. The Union claimed that Gateway and NAI should be treated as one entity and accordingly that the agreement required both companies to use only Union labor. Under the terms of the agreement, the dispute was submitted to arbitration.
Before the arbitration hearing, two proceedings were filed before the NLRB. First, on August 25, the Union filed an unfair labor practice charge. Second, Gateway filed a unit clarification petition. Gateway asked the arbitrator to defer to the NLRB. The arbitrator refused. After a hearing at which the parties introduced considerable evidence about the relationship between Gateway and NAI, the arbitrator found in favor of the Union. Gateway appealed to the District Court. Chief Judge Peckham granted summary judgment for the Union on a counterclaim for enforcement of the arbitration award. On appeal here, Gateway raises two claims: first, that the arbitrator should not have decided the merits of the dispute; and second, that we should not enforce the arbitrator’s decision.
II.
DISCUSSION
A. Arbitrability
Gateway argues that it was improper for the arbitrator to decide this case for two reasons. First, it claims that the issue was not submitted to the arbitrator. Second, it claims that arbitrators do not have power to decide unit representation issues. Neither reason has merit.
1. Submission to Arbitration. We commence with a point that is beyond dispute: an issue is arbitrable only if the parties have agreed to arbitration. E.g., George Day Construction Co. v. United Brotherhood of Carpenters, 722 F.2d 1471, 1474-75 (9th Cir.1984). Section 51 of the Master Agreement, which provides for arbitration, applies to “[a]ny dispute concerning the relationship of the parties [and] any application or interpretation of this Agreement.” Excerpt of Record at 20 [hereinafter cited as E.R.]. Interpreting similar language in a collective bargaining agreement, the Supreme Court has said, “There is nothing to limit the sweep of this language or to except any dispute or class of disputes from arbitration. In that circumstance, we must conclude that the parties meant what they said — that ‘any difference’ ... should be referred to the arbitrator for decision.” International Union of Operating Engineers v. Flair Builders, Inc., 406 U.S. 487, 491, 92 S.Ct. 1710, 1712, 32 L.Ed.2d 248 (1972).
In this case, the Union relies on section 9 of the Master Agreement, which provides:
This Agreement is binding upon each individual employer regardless of whether or not he or it changes the name or style or address of his or its business.
Each individual employer, corporate or other legal entity, or its successor, shall be liable under, subject to, and bound by this Agreement.
E.R. at 10 (emphasis added). The Union asserts that this language binds NAI to the Master Agreement and, thus, to section 51 of the Master Agreement, the arbitration clause. It is clear that this assertion, when rejected by NAI, constitutes a “dispute” within the meaning of section 51 of the Master Agreement. Accordingly, the issue was arbitrable.
2. The Power of Arbitrators. A bit of background is necessary to explicate Gateway’s claim that arbitrators do not have power to decide representation issues. The Union’s effort to apply the agreement with Gateway to NAI, a nonsignatory employer, can prevail under either of two doctrines — the “alter ego” doctrine or the “single employer” doctrine. Under the alter ego doctrine, the court considers the interrelation of operations, common management, centralized control of labor relations, and common ownership. If these factors show that the transaction is a sham designed to avoid the obligations of a collective bargaining agreement, the nonsignato-ry employer will be bound. See Carpenters’ Local Union No. 1478 v. Stevens, 743 F.2d 1271, 1276-77 (9th Cir.1984). Under the single-employer doctrine, the same factors are considered. To bind the nonsig-natory under this doctrine, however, the two employers must be shown to constitute a single bargaining unit. See id. at 1276.
It is this requirement upon which Gateway grounds its argument. It points to Brotherhood of Teamsters v. California Consolidators, Inc., 693 F.2d 81 (9th Cir.1982) (per curiam), in which this court held that a district court has jurisdiction to decide single-employer issues but does not have jurisdiction to decide the bargaining unit issue in such cases, id. at 83; see South Prairie Construction Co. v. Local No. 627, International Union of Operating Engineers, 425 U.S. 800, 96 S.Ct. 1842, 48 L.Ed.2d 382 (1976) (per curiam) (holding that federal courts cannot make initial findings on unit-representation issues, but must defer to the NLRB). It follows, Gateway claims, that California Consolidators precludes arbitrators from imposing the obligations of labor agreements on nonsigna-tory employers like NAI.
We disagree. First, the arbitrator’s decision could rest on the alter ego doctrine, which does not require a unit-representation determination. Cf. Northwest Administrators, Inc. v. Con Iverson Trucking, Inc., 749 F.2d 1338, 1340 (9th Cir.1984) (holding that a district court has jurisdiction over alter ego claims). Second, it probably would be permissible for the arbitrator to make a unit-representation determination even though the district court would be precluded from making such a determination in the first instance. See Carey v. Westinghouse Electric Corp., 375 U.S. 261, 266-72, 84 S.Ct. 401, 406-09, 11 L.Ed.2d 320 (1964) (holding that arbitrators can decide certain representational issues); Stevens, 743 F.2d at 1278-79 & n. 11 (reconciling Carey and South Prairie).
Accordingly, we hold that it was proper for the arbitrator to proceed to decision of this dispute.
B. Enforcement of the Arbitrator’s Decision
Finally, Gateway argues that we should refuse to enforce the arbitrator’s decision. The law by which we must be guided is clear:
Where the decision involves contractual interpretation, we must defer as to any decision which draws its essence from the agreement. Therefore, if on its face, the award represents a plausible interpretation of the contract, judicial inquiry ceases and the award must be enforced. This remains so even if the basis for the decision is ambiguous and notwithstanding the erroneousness of any factual findings or legal conclusions, absent a manifest disregard of the law.
However, we are not bound to defer to an award which actually violates the law or any explicit, well defined and dominant public policy.
George Day Construction Co. v. United Brotherhood of Carpenters, 722 F.2d 1471, 1477 (9th Cir.1984) (citations omitted); see Carpenters’ Local Union No. 1478 v. Stevens, 743 F.2d 1271 (9th Cir.1984) (refusing to enforce an arbitration award that conflicted with the NLRB’s resolution of the same controversy). Gateway suggests four defects in the arbitration award, none of which are sufficient to preclude enforcement of the award.
First, Gateway asserts that the arbitrator’s decision should not be enforced because the arbitrator did not apply NLRB case law on the single-employer or alter ego doctrines. Gateway tries to bolster this claim by pointing to section 10 of the Master Agreement, which provides that “interpretation of ... this Agreement is ... intended to apply no broader [sic] than that permitted by law.” E.R. at 11. We are unpersuaded. First, as appellant’s own brief adequately demonstrates, the record contained evidence that could have persuaded the arbitrator that the NLRB requirements were satisfied. See Opening Brief for Petitioner/Appellant Gateway Structures, Inc. at 16-22. More importantly, however, George Day makes it clear that parties who bargain for arbitration do not bargain for an award identical to judicial determination. To assert that the arbitrator misapplied a fact-specific test like the alter ego doctrine does not justify a refusal to enforce the arbitration award.
Second, Gateway argues that enforcement would interfere with the rights of NAI employees by subjecting them to a collective bargaining agreement without any showing of majority support or a determination of the appropriate representational unit. No such inquiry is required. As the Supreme Court explained in Carey v. Westinghouse Electric Corp., 375 U.S. 261, 84 S.Ct. 401, 11 L.Ed.2d 320 (1964), “the possibility of conflict [with a subsequent NLRB ruling] is no barrier to resort to a tribunal other than the Board.” Id. at 272, 84 S.Ct. at 409. If such an NLRB ruling comes,
the Board’s ruling would, of course, take precedence; and if the employer’s action had been in accord with that ruling, it would not be liable for damages under § 301.
... The superior authority of the Board may be invoked at any time. Meanwhile the therapy of arbitration is brought to bear in a complicated and troubled area.
Id. Although this circuit has never specifically adopted this reasoning, see Stevens, 743 F.2d at 1280 & n. 12 (noting the issue), other circuits have, see id. at 1280 n. 12. We agree that it would be improper to allow the speculative possibility of subsequent NLRB decisions to prevent enforcement of the arbitrator’s 'award against Gateway.
Third, Gateway contends that we should not enforce the arbitration award on the ground that the arbitrator did not explain his result with sufficient specificity. At the arbitration hearing, the parties agreed that the arbitrator should issue an award promptly and prepare a full opinion later. In the district court proceedings, both parties agreed to continue the case until the arbitrator provided the full opinion. Finally, the arbitrator provided a statement that he adopted his original four-page award as his full opinion.
We reject Gateway’s contention. The arbitrator’s opinion fairly outlines the basis of his decision — NAI and Gateway operated their companies as essentially one business. Absent a specific provision in the agreement of the parties, we think it is irrelevant that the opinion does not, for instance, discuss the relevant NLRB case law. See George Day Construction Co. v. United Brotherhood of Carpenters, 722 F.2d 1471, 1477 (9th Cir.1984) (noting that a court must enforce an arbitration award even if “the decision is ambiguous and notwithstanding the erroneousness of any factual findings or legal conclusions” (citations omitted)).
Finally, Gateway claims that the decision does not comport with the terms of its memorandum agreement with the Union. Although there was conflicting testimony, see, e.g., Supplemental Excerpt of Record at 32, 54, we will assume arguendo that the parties agreed that Gateway alone would be bound by the agreement and that Gateway would work only on Yon’s Market. Unfortunately, this assumed parol agreement is not clearly reflected in the written agreement, which does not define the scope of work to be covered. E.R. at 7. Moreover, the written memorandum agreement, like the Master Agreement, refers to the individual employer and the name and style under which he conducts business. It would be reasonable for the arbitrator to conclude that this language referred to John Langford (who signed the agreement and controlled both NAI and Gateway) rather than to Gateway, and that Langford conducted business under the names NAI and Gateway. Langford’s signature on the agreement supports this construction. He did not clearly indicate that he signed only in a representative capacity. His signature could be construed as that of a second individual employer. See E.R. at 7. In brief, although the basis for the arbitrator’s decision is unclear, we hold it to be a plausible decision. It is not our place to substitute our judgment for that of the arbitrator; the parties bargained for his decision, not ours.
As Chief Judge Peckham pointed out, “The arbitrator’s conclusion did not directly conflict with any clause of the 1981 agreement.” E.R. at 70. Accordingly, the district court’s conclusion that the arbitration award should be enforced is affirmed.
AFFIRMED.
Question: What is the specific issue in the case within the general category of "labor relations"?
A. union organizing
B. unfair labor practices
C. Fair Labor Standards Act issues
D. Occupational Safety and Health Act issues (including OSHA enforcement)
E. collective bargaining
F. conditions of employment
G. employment of aliens
H. which union has a right to represent workers
I. non civil rights grievances by worker against union (e.g., union did not adequately represent individual)
J. other labor relations
Answer:
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songer_applfrom
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J
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What follows is an opinion from a United States Court of Appeals. Your task is to identify the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court).
STATE OF WISCONSIN, Plaintiff-Appellee, v. Kathleen SCHAFFER, Defendant-Appellee, Appellant.
Nos. 76-2234 and 76-2235.
United States Court of Appeals, Seventh Circuit.
Argued May 2, 1977.
Decided Nov. 3, 1977.
Stephen M. Glynn, James M. Shellow, Milwaukee, Wis., for defendant-appellant.
William J. Mulligan, U. S. Atty., John A. Nelson, Asst. U. S. Atty., Milwaukee, Wis., for plaintiff-appellee.
Before FAIRCHILD, Chief Judge, DUFFY, Senior Circuit Judge, and SWYGERT, Circuit Judge.
FAIRCHILD, Chief Judge.
The appellant, Kathleen Schaffer, was charged with first degree murder of William Weber and was tried for this offense in the Circuit Court for Milwaukee County, Wisconsin.
During the course of this trial Schaffer caused the circuit court to issue a subpoena duces tecum requiring William Mulligan, the United States Attorney for the Eastern District of Wisconsin, to produce certain documents, including the minutes of a federal grand jury relating to the Weber homicide. Having been served with the subpoena, the United States Attorney moved the circuit court to quash it as it related to the grand jury transcripts. The circuit court denied the motion and ordered the United States Attorney to produce the grand jury materials or show cause why he should not be held in contempt.
Mulligan promptly filed a petition for removal in the United States District Court. Although the petition was captioned State of Wisconsin v. Kathleen Schaffer, it is clear from the text that no attempt was being made to remove the criminal case against Schaffer, but only the proceeding directed at the United States Attorney to compel him to produce the grand jury minutes or show cause why he should not be held in contempt. The petition cited 28 U.S.C. § 1442, and, echoing its language, characterized the action to be removed as one civil in nature commenced in a state court against an officer of the United States for an act under color of such office or on account of a right or authority claimed under an Act of Congress. The removal was to embrace only the issue of the subpoena requiring the United States Attorney to produce grand jury minutes, and the copies of pleadings attached related only to that matter.
Hearings were had before the district court on November 26 and 30, 1976. On December 3, the district court entered an order, embodying the views announced by the court November 30. The court found that it had jurisdiction under 28 U.S.C. § 1442; that the removal related only to the issue of the circuit court order denying the motion to quash the subpoena and the order to show cause, and did not remove the state court murder trial. In its order the district court vacated the order for the production of grand jury minutes and order to show cause why the United States Attorney should not be held in contempt. Kathleen Schaffer appealed (No. 76-2234).
During the course of the hearings on the removed contempt matter, and in response to the suggestion of the court as to the proper procedure, counsel for Ms. Schaffer filed a petition under Rule 6(e), Fed.R. Crim.P., for the release of testimony before grand juries “relating to the death of William Weber, the activities of William Weber prior to his death and the transactions between such witnesses and William Weber.” A further hearing was held December 1.
On December 3, 1976, the district court denied the petition, finding that petitioner had failed to show particularized need sufficient to overbalance the strong policy in favor of the secrecy of grand jury proceedings. The court declined to assume the burden of an in-camera inspection of the minutes identified by the United States Attorney to determine the presence of exculpatory material, although the court did ascertain that none of the persons identified by petitioner in connection with the State proceedings appeared before the grand jury. Ms. Schaffer appealed (No. 76-2235).
Her trial in state court proceeded, and resulted in her conviction and sentence to life imprisonment.
I. The Vacation of the Subpoena — Contempt Order, Appeal No. 76-2234
Appellant does not argue the merits of the decision of the district court that the circuit court order requiring the United States Attorney to make disclosure or face contempt proceedings must be vacated. We think it clear that a court .may not compel such disclosure in violation of the obligation of secrecy imposed by Rule 6(e), and that if the merits be reached, the order of the district court was correct.
Appellant challenges the jurisdiction of the district court to decide the merits for the reason that the removal petition was legally insufficient to bring the subpoena —contempt matter before the court.
She contends that the state court’s order to show cause did not commence a removable “civil action” or “criminal prosecution” within the removal statute, that no independent action was initiated against the United States Attorney, and, therefore, no removable action existed. The appellant argues that the proceeding involving the United States Attorney was merely ancillary to the trial of the criminal case, and an exercise of the inherent power of a court to secure compliance with its subpoena.
28 U.S.C. § 1442(a) provides that “A civil action or criminal prosecution commenced in a State court against any of the following persons may be removed by them to the district court . . .” Subparagraph (1) includes among these persons “Any officer of the United States, . . for any act under color of such office . . . .” None of the parties questions the fact that Mr. Mulligan qualified as an officer acting under color of his office. This case was removable, therefore, if the proceeding against him can be characterized as a civil action or criminal prosecution for the purpose of § 1442(a).
The appellant argues that the order to show cause did not initiate an action against Mr. Mulligan. However, by statute a trial judge is empowered to commence contempt proceedings and use an order to show cause as the notice of process. Wis. Stat. §§ 295.01, 295.03(1) (1976). Although the court was not informed of the United States Attorney’s refusal to comply with the subpoena by verified petition, as required by § 295.03, the court was made aware of the non-compliance by Mr. Mulligan’s own motion to quash the subpoena. The subsequent denial of Mulligan’s motion and the issuing of an order to show cause sufficiently commenced the contempt proceeding against Mulligan.
We think the language “civil action or criminal prosecution” should be broadly construed in the light of the purpose of the subsection, and find ourselves in agreement with the statements of the Fourth Circuit in State of North Carolina v. Carr, 386 F.2d 129, 131 (4th Cir. 1967):
The issue is whether or not the contempt proceedings constituted a ‘civil action or criminal prosecution commenced in a State court’ within the meaning of 28 U.S.C. § 1442(a). The District Court classified the present proceeding as ‘criminal.’ The Government argues that it was ‘civil.’ The State urges that it was neither, but rather ‘sui generis.’ Accordingly, the State says, it was not either a ‘civil action’ or ‘criminal prosecution’ within the meaning of the removal statute. We think it unfruitful to quibble over the label affixed to this contempt action. Regardless of whether it is called civil, criminal, or sui generis, it clearly falls within the language and intent of the statute.
To repeat, the central and grave concern of the statute is that a Federal officer or agent shall not be forced to answer for conduct assertedly within his duties in any but a Federal forum. Thus the statute looks to the substance rather than the form of the state proceeding; this is the reason for the breadth of its language. Accordingly, the applicability of the statute to the present case is perfectly apparent. By citing Carr for contempt, the State Court attempted to subject him to incarceration until such time as he complied with the Court’s order and thus disobeyed the directive of his superior officers. A statute designed to permit Federal officers to perform their duties without State interference clearly applies to such a situation, regardless of the label the State chooses to affix to its action.
We conclude that the proceeding here, although ancillary to the murder trial, constituted a sufficient separate action against Mr. Mulligan for an act in his official capacity as United States Attorney. The resultant ease, whether deemed criminal or civil in nature, placed Mulligan in jeopardy for his refusal, based on his official duty, to comply with a state court order. He was required to defend his actions and face the consequences of his disobedience. Whatever the docketed title of this case, it represented a distinct action against Mulligan, commenced by the order to show cause. Clearly the petition did not seek removal of the entire state murder prosecution. The issue in the proceeding against Mulligan was, in our opinion, distinct and separable from the charge against Kathleen Schaffer, and, as such, validly removed without also removing the murder case. United States v. Penney, 320 F.Supp. 1396, 1397 (D.C. 1970).
The purpose of the removal statute is to insure a federal forum for cases where federal officials must raise defenses arising out of their official duties. Willingham v. Morgan, 395 U.S. 402, 405, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969). Mr. Mulligan’s refusal to comply with the subpoena was based on the proposition that he could not disclose the requested material without violating Rule 6(e) of the Federal Rules of Criminal Procedure. This rule prohibits his disclosure of grand jury transcripts unless done in the performance of his duties or unless directed by the district court. His defense to the charge of contempt thus was based on his duty under federal law. The removal statute is clearly broad enough “ . to cover all cases where federal officers can raise a colorable defense . . . ” arising out of their official duties. 395 U.S. at 405-407, 89 S.Ct. at 1816. Mr. Mulligan, having become a defendant in a contempt proceeding, was faced with such a case, and, therefore the exercise of removal jurisdiction by the district court was proper.
The appellant suggests, however, that if Mr. Mulligan’s involvement in the contempt proceeding made removal proper, the entire murder prosecution was removed to the federal district court. Appellant points out that when an action is pending in a state court against a number of defendants, only one of whom is a federal officer, sued on account of an official act, removal at the instance of the federal officer removes the entire action with all defendants. See Iowa Public Service Co. v. Iowa State Commerce Commission, 407 F.2d 916, 918 n.3 (8th Cir. 1969), cert. denied, 396 U.S. 826, 90 S.Ct. 71, 24 L.Ed.2d 77 (1970); Allman v. Hanley, 302 F.2d 559, 562 (5th Cir. 1962). As already stated, we think the proceeding against the federal officer here was distinct and separate for the purpose of the removal statute.
Finally, the appellant refers us to a district court opinion, In Re Heisig, 178 F.Supp. 270 (N.D.Ill.1959), and suggests that its reasoning should control the removal issue. Heisig involved the removal of contempt proceedings by federal officials. The district court remanded the case to the state court holding that the contempt proceeding was not a civil action or criminal prosecution, and, therefore, not removable under the statute. 178 F.Supp. at 273. This finding was only one of the several grounds which the court thought justified a remand. To the extent that Heisig held that a contempt proceeding does not constitute a civil action or criminal prosecution within the meaning of § 1442, we deem it erroneous.
II. The Denial of the Rule 6(e) Petition, Appeal No. 76-2285
The appellant also appeals from the order denying her petition for disclosure of the grand jury testimony. The district court found that the appellant had “ . . . failed to satisfy the particularized need requirement which has been en-grafted upon Rule 6(e) of the Federal Rules of Criminal Procedure.” After analyzing the appellant’s petition, the court characterized the request for disclosure as a “mere hope” that some unknown witnesses may have provided the grand jury with some kind of exculpatory evidence. Balanced against the need for secrecy of grand jury proceedings, the court held that the appellant’s claim did not warrant disclosure of the transcripts.
Grand jury testimony has traditionally been treated as confidential communication and, therefore, the proceedings have been cloaked in secrecy. United States v. Socony Vacuum Oil Co., 310 U.S. 150, 233, 60 S.Ct. 811, 84 L.Ed. 1129 (1940); United States v. Johnson, 319 U.S. 503, 513, 63 S.Ct. 1233, 87 L.Ed. 1546 (1943). The scope and application of the rule of secrecy of grand jury proceedings has been codified in Rule 6(e) of the Federal Rules of Criminal Procedure. Paragraph (e)(1) of this rule, which was recently amended, generally prohibits disclosure of the grand jury proceedings by a government attorney, a grand juror, or anyone who assists in the taking of testimony. Subparagraph (e)(2)(C)(i) provides an important exception to the rule by permitting disclosure “when so directed by the court preliminarily to or in connection with a judicial proceeding . . . .” The specific reasons for the maintenance of secrecy are varied. See, United States v. Rose, 215 F.2d 617, 628-29 (3rd Cir. 1954). They all support the important policy of encouraging and facilitating the exchange of information between witnesses and grand jurors, free from the fear of retaliation or tampering. United States v. Proctor & Gamble, 356 U.S. 677, 682, 78 S.Ct. 983, 2 L.Ed.2d 1077 (1958).
A trial judge must be circumspect in the exercise of his discretion in ordering the disclosure of grand jury minutes. He may only order such disclosure when the party seeking it has demonstrated that a “particularized need exists . . . which outweighs the policy of secrecy.” Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 400, 79 S.Ct. 1237, 1241, 3 L.Ed.2d 1323 (1959). The “particularized need” standard was reaffirmed in Dennis v. United States, 384 U.S. 855, 868-75, 86 S.Ct. 1840, 16 L.Ed.2d 975 (1966) with a general suggestion by the Court favoring disclosure. Within the context of disclosure based on need, the trial judge is required to choose the path which best promotes the administration of criminal justice. 384 U.S. at 870, 86 S.Ct. 1840.
The appellant argues that she has demonstrated particularized need for the transcripts. She contends that since the federal grand jury has finished its work the reasons for maintaining secrecy are substantially less compelling than the policies favoring disclosure. At stake, she adds, is her ability to prove her innocence. Finally, the appellant stresses that the disclosure would be monitored by the state trial judge, who has volunteered to screen the grand jury material for exculpatory evidence. Only if the judge finds such evidence would any grand jury material be disclosed to the appellant.
Appellant was tried for the murder of William Weber, which occurred November 12, 1973. The principal witness against her was Earl Seymour, who has pled guilty to second degree murder after a mistrial for first degree murder, and testified that he shot Weber. The State’s theory was that appellant, said by Seymour to have been present at the shooting, had lured Weber to the place where Seymour shot him, and had procured the killing because Weber, her source of drugs, had threatened to cut off her supply.
Some months after the homicide, June, 1974, and thereafter, the federal grand jury investigated illicit drug activities, and are thought to have inquired, incidentally, into the related killings not only of Weber, but one Mitchell, killed a few days later. Indictments were returned against Callen, Druml, and Gaertner. The federal DEA is known to have investigated these activities. At lest Callen and Druml have been convicted. Schaffer was first charged with the murder of Weber in August, 1975.
Testimony at the Schaffer trial developed that Callen was associated with Weber in the sale of cocaine. Druml was their supplier, to whom Weber came to owe a substantial amount of money. Two days before the homicide, Callen and Druml visited Weber and Druml demanded payment.
Weber’s girlfriend, Maloney, found her apartment ransacked the day of the murder, but found $10,000 which the intruders had missed. Callen later asked her about the money, and she turned it over to him.
Seymour, who confessed to killing Weber, and testified against Schaffer, had dealings with Gaertner. He also testified to playing an intriguing role as a double agent, employed on a commission basis to assist the Republic of Mexico in problems arising from importing and exporting contraband. He claimed to be responsible for one to two dozen arrests for drug offenses by American authorities. Moreover, he had been tried for the Weber murder, but the trial ended in a mistrial, after which he plead guilty to second degree murder. He had been a witness in his own behalf at the first trial and acknowledged at the Schaffer trial numerous instances of perjury.
Counsel for Schaffer represented that the defense position was that Schaffer was not present when Seymour killed Weber, although the record does not show whether she had testified or intended to testify. Counsel suggested that the grand jury minutes might reflect testimony that the homicide was motivated as a result of Weber's dealings in drugs with others, and particularly of his refusal to pay Druml.
It does appear that testimony before the grand jury related at least incidentally to the killing of Weber. The Assistant United States Attorney tendered sealed packets of testimony to the district court. He represented that in one packet were the transcripts “which relate to the investigation that [counsel] is apparently concerned with.” A smaller packet was said to contain excerpts described as “those portions of testimony which may in some remote way relate to the subject which is included in the petition submitted on behalf of Kathleen Schaffer.”
It also appears that the state authorities had conducted a John Doe proceeding, investigating the same matters as the federal grand jury. All the records of this proceeding, including the reporter’s notes and lists of witnesses have been lost.
Although appellant’s petition sought “release” of the grand jury testimony without qualification, counsel orally, at the hearing, very drastically and significantly narrowed his request. He asked only that the minutes be turned over for in-camera inspection by the Honorable Max Raskin, who presided at the state trial, and was thus in a position to be aware whether any material would be helpful to appellant. This limitation has been repeated in the briefs on appeal, with testimony being made known to counsel only upon Judge Raskin’s determination that the testimony constituted exculpatory evidence.
We are aware that demonstrating a particularized need is often a difficult task and applying this standard to a given set of facts is an inexact process. Courts have found that a particular need has been shown when disclosure is requested to impeach a witness. United States v. Proctor & Gamble, supra, 356 U.S. at 683, 78 S.Ct. 983, to attack deposition testimony, Atlantic City Electric Co. v. A.B. Chance Co., 313 F.2d 431 (2d Cir. 1963), or to refresh a witness’ recollection about matters he previously testified to before a grand jury, Baker v. United States Steel Corp., 492 F.2d 1074, 1079 (2d Cir. 1974).
The district court declined to review the grand jury minutes for testimony which might appear to aid appellant’s ease, but he did ascertain from the list of witnesses that none of the individuals named by appellant had testified before the grand jury. Hence impeachment by use of prior inconsistent statements was ruled out. Appellant was not able to name a particular witness before the grand jury whose testimony she needed to see. Thus it must be acknowledged that appellant has not demonstrated the more traditional forms of need.
We think, however, on balance, that it was an abuse of discretion not to authorize disclosure to Judge Raskin, with suitable directions for disclosure by him to appellant’s counsel only in the event and to the extent that testimony likely to be helpful to her case appeared.
We think one consideration that should be given particular weight here is the fact that the state court judge issued a subpoena duces tecum requiring the production of the federal grand jury minutes. The subpoena was for the distinct purpose of furthering a full and fair trial in the state prosecution. It cannot be doubted that Judge Raskin ordered the production of the minutes in the interest of a proper administration of justice. Accordingly, principles of federalism and comity come into play and should be accommodated unless factors dictating secrecy are overriding.
Once a grand jury has completed its work, indictments having been brought, the reasons for secrecy become less compelling. State of Illinois v. Sarbaugh, 552 F.2d 768, 775 (7th Cir. 1977). The grand jury in question sat between June and November of 1974, and even though the government asserts that some of the matters relating to that grand jury investigation have not been concluded, it has undoubtedly completed its primary task. “[Ajfter the grand jury’s functions are ended, disclosure is wholly proper where the ends of justice require it.” Socony-Vacuum Oil Co., supra, 310 U.S. at 234, 60 S.Ct. at 849.
We recognize that at this juncture, the state trial having been completed, a review of the minutes would doubtless be carried on in the light of standards for newly discovered evidence. Naden v. Johnson, 61 Wis.2d 375, 212 N.W.2d 585 (1973). We assume that Judge Raskin is still willing to undertake the task.
Because of the obvious questions concerning the credibility and criminal involvement of the State’s chief witness, the plausibility of the involvement of Weber’s drug traffic associates in his death, the probability that grand jury testimony concerning the transactions of his associates at about the time of the murder would disclose that fact, if true, the accessory type theory of Schaffer’s guilt, and the seriousness of the offense with which she was charged and convicted, and because disclosure will be made only to Judge Raskin until evidence helpful ttf appellant is found present, we think appellant’s need for disclosure thus limited outweighs the policy of secrecy.
The judgment appealed from in Appeal No. 7&-2234 is AFFIRMED. The judgment appealed from in Appeal No. 76-2235 is REVERSED, and the cause remanded for further proceedings consistent with this opinion.
. An order denying a petition, based on Rule 6(e), which “disposes of the contentions of all the parties, leaving nothing else to be decided, . ends the controversy before . . . ” the court, and therefore is appealable under 28 U.S.C. § 1291. United States v. Byoir, 147 F.2d 336, 337 (5th Cir. 1945). See also, State of Illinois v. Sarbaugh, 552 F.2d 768, 773 (7th Cir. 1977). The order before us fits this characterization and is therefore appealable.
. Pub.L. 95-78. The Rule was amended on July 30, 1977, effective October 1, 1977.
Question: What is the type of district court decision or judgment appealed from (i.e., the nature of the decision below in the district court)?
A. Trial (either jury or bench trial)
B. Injunction or denial of injunction or stay of injunction
C. Summary judgment or denial of summary judgment
D. Guilty plea or denial of motion to withdraw plea
E. Dismissal (include dismissal of petition for habeas corpus)
F. Appeals of post judgment orders (e.g., attorneys' fees, costs, damages, JNOV - judgment nothwithstanding the verdict)
G. Appeal of post settlement orders
H. Not a final judgment: interlocutory appeal
I. Not a final judgment: mandamus
J. Other (e.g., pre-trial orders, rulings on motions, directed verdicts) or could not determine nature of final judgment
K. Does not fit any of the above categories, but opinion mentions a "trial judge"
L. Not applicable (e.g., decision below was by a federal administrative agency, tax court)
Answer:
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sc_precedentalteration
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B
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify whether the opinion effectively says that the decision in this case "overruled" one or more of the Court's own precedents. Alteration also extends to language in the majority opinion that states that a precedent of the Supreme Court has been "disapproved," or is "no longer good law". Note, however, that alteration does not apply to cases in which the Court "distinguishes" a precedent.
MISSOURI et al. v. JENKINS, by her friend, AGYEI, et al.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
No. 88-64.
Argued February 21, 1989
Decided June 19, 1989
Bruce Farmer, Assistant Attorney General of Missouri, argued the cause for petitioners. With him on the brief were William L. Webster, Attorney General, Terry Allen, Deputy Attorney General, and Michael L. Boicourt and Bart A. Ma-tanic, Assistant Attorneys General.
Jay Topkis argued the cause for respondents. With him on the brief were Julius LeVonne Chambers, Charles Stephen Ralston, Arthur A. Benson II, Russell E. Lovell II, and Theodore M. Shaw.
John A. DeVault III filed a brief for the National Association of Legal Assistants, Inc., as amicus curiae urging affirmance.
Justice Brennan
delivered the opinion of the Court.
This is the attorney’s fee aftermath of major school desegregation litigation in Kansas City, Missouri. We granted certiorari, 488 U. S. 888 (1988), to resolve two questions relating to fees litigation under 90 Stat. 2641, as amended, 42 U. S. C. § 1988. First, does the Eleventh Amendment prohibit enhancement of a fee award against a State to compensate for delay in payment? Second, should the fee award compensate the work of paralegals and law clerks by applying the market rate for their work?
I
This litigation began in 1977 as a suit by the Kansas City Missouri School District (KCMSD), the school board, and the children of two school board members, against the State of Missouri and other defendants. The plaintiffs alleged that the State, surrounding school districts, and various federal agencies had caused and perpetuated a system of racial segregation in the schools of the Kansas City metropolitan area. They sought various desegregation remedies. KCMSD was subsequently realigned as a nominal defendant, and a class of present and future KCMSD students was certified as plaintiffs. After lengthy proceedings, including a trial that lasted 754 months during 1983 and 1984, the District Court found the State of Missouri and KCMSD liable, while dismissing the suburban school districts and the federal defendants. It ordered various intradistrict remedies, to be paid for by the State and KCMSD, including $260 million in capital improvements and a magnet-school plan costing over $200 million. See Jenkins v. Missouri, 807 F. 2d 657 (CA8 1986) (en banc), cert. denied, 484 U. S. 816 (1987); Jenkins v. Missouri, 855 F. 2d 1295 (CA8 1988), cert. granted, 490 U. S. 1034 (1989).
The plaintiff class has been represented, since 1979, by Kansas City lawyer Arthur Benson and, since 1982, by the NAACP Legal Defense and Educational Fund, Inc. (LDF). Benson and the LDF requested attorney’s fees under the Civil Rights Attorney’s Fees Awards Act of 1976, 42 U. S. C. § 1988. Benson and his associates had devoted 10,875 attorney hours to the litigation, as well as 8,108 hours of paralegal and law clerk time. For the LDF the corresponding figures were 10,854 hours for attorneys and 15,517 hours for paralegals and law clerks. Their fee applications deleted from these totals 3,628 attorney hours and 7,046 paralegal hours allocable to unsuccessful claims against the suburban school districts. With additions for postjudgment monitoring and for preparation of the fee application, the District Court awarded Benson a total of approximately $1.7 million and the LDF $2.3 million. App. to Pet. for Cert. A22-A43.
In calculating the hourly rate for Benson’s fees the court noted that the market rate in Kansas City for attorneys of Benson’s qualifications was in the range of $125 to $175 per hour, and found that “Mr. Benson’s rate would fall at the higher end of this range based upon his expertise in the area of civil rights.” Id., at A26. It calculated his fees on the basis of an even higher hourly rate of $200, however, because of three additional factors: the preclusion of other employment, the undesirability of the case, and the delay in payment for Benson’s services. Id., at A26-A27. The court also took account of the delay in payment in setting the rates for several of Benson’s associates by using current market rates rather than those applicable at the time the services were rendered. Id., at A28-A30. For the same reason, it calculated the fees for the LDF attorneys at current market rates. Id., at A33.
Both Benson and the LDF employed numerous paralegals, law clerks (generally law students working part time), and recent law graduates in this litigation. The court awarded fees for their work based on Kansas City market rates for those categories. As in the case of the attorneys, it used current rather than historic market rates in order to compensate for the delay in payment. It therefore awarded fees based on hourly rates of $35 for law clerks, $40 for paralegals, and $50 for recent law graduates. Id., at A29-A31, A34. The Court of Appeals affirmed in all respects. 838 F. 2d 260 (CA8 1988).
II
Our grant of certiorari extends to two issues raised by the State of Missouri. Missouri first contends that a State cannot, consistent with the principle of sovereign immunity this Court has found embodied in the Eleventh Amendment, be compelled to pay an attorney’s fee enhanced to compensate for delay in payment. This question requires us to examine the intersection of two of our precedents, Hutto v. Finney, 437 U. S. 678 (1978), and Library of Congress v. Shaw, 478 U. S. 310 (1986).
In Hutto v. Finney, the lower courts had awarded attorney’s fees against the State of Arkansas, in part pursuant to §1988, in connection with litigation over the conditions of confinement in that State’s prisons. The State contended that any such award was subject to the Eleventh Amendment’s constraints on actions for damages payable from a State’s treasury. We relied, in rejecting that contention, on the distinction drawn in our earlier cases between “retroactive monetary relief” and “prospective injunctive relief.” See Edelman v. Jordan, 415 U. S. 651 (1974); Ex parte Young, 209 U. S. 123 (1908). Attorney’s fees, we held, belonged to the latter category, because they constituted reimbursement of “expenses incurred in litigation seeking only prospective relief,” rather than “retroactive liability for prelitigation conduct.” Hutto, 437 U. S., at 695; see also id.,. at 690. We explained: “Unlike ordinary ‘retroactive’ relief such as damages or restitution, an award of costs does not compensate the plaintiff for the injury that first brought him into court. Instead, the award reimburses him for a portion of the expenses he incurred in seeking prospective relief.” Id., at 695, n. 24. Section 1988, we noted, fit easily into the longstanding practice of awarding “costs” against States, for the statute imposed the award of attorney’s fees “as part of the costs.” Id., at 695-696, citing Fairmont Creamery Co. v. Minnesota, 275 U. S. 70 (1927).
After Hutto, therefore, it must be accepted as settled that an award of attorney’s fees ancillary to prospective relief is not subject to the strictures of the Eleventh Amendment. And if the principle of making such an award is beyond the reach of the Eleventh Amendment, the same must also be true for the question of how a “reasonable attorney’s fee” is to be calculated. See Hutto, supra, at 696-697.
Missouri contends, however, that the principle enunciated in Hutto has been undermined by subsequent decisions of this Court that require Congress to “express its intention to abrogate the Eleventh Amendment in unmistakable language in the statute itself.” Atascadero State Hospital v. Scanlon, 473 U. S. 234, 243 (1985); Welch v. Texas Dept, of Highways and Public Transportation, 483 U. S. 468 (1987). See also Dellmuth v. Muth, ante, p. 223; Pennsylvania v. Union Gas Co., ante, p. 1. The flaw in this argument lies in its misreading of the holding of Hutto. It is true that in Hutto we noted that Congress could, in the exercise of its enforcement power under § 5 of the Fourteenth Amendment, set aside the States’ immunity from retroactive damages, 437 U. S., at 693, citing Fitzpatrick v. Bitzer, 427 U. S. 445 (1976), and that Congress intended to do so in enacting § 1988, 437 U. S., at 693-694. But we also made clear that the application of § 1988 to the States did not depend on congressional abrogation of the States’ immunity. We did so in rejecting precisely the “clear statement” argument that Missouri now suggests has undermined Hutto. Arkansas had argued that § 1988 did not plainly abrogate the States’ immunity; citing Employees v. Missouri Dept, of Public Health and Welfare, 411 U. S. 279 (1973), and Edelman v. Jordan, supra, the State contended that “retroactive liability” could not be imposed on the States “in the absence of an extraordinarily explicit statutory mandate.” Hutto, 437 U. S., at 695. We responded as follows: “[Tjhese cases [Employees and Edelman] concern retroactive liability for prelitigation conduct rather than expenses incurred in litigation seeking only prospective relief. The Act imposes attorney’s fees ‘as part of the costs.’ Costs have traditionally been awarded without regard for the States’ Eleventh Amendment immunity.” Ibid.
The holding of Hutto, therefore, was not just that Congress had spoken sufficiently clearly to overcome Eleventh Amendment immunity in enacting § 1988, but rather that the Eleventh Amendment did not apply to an award of attorney’s fees ancillary to a grant of prospective relief. See Maine v. Thiboutot, 448 U. S. 1, 9, n. 7 (1980). That holding is unaffected by our subsequent jurisprudence concerning the degree of clarity with which Congress must speak in order to override Eleventh Amendment immunity, and we reaffirm it today.
Missouri’s other line of argument is based on our decision in Library of Congress v. Shaw, supra. Shaw involved an application of the longstanding “no-interest rule,” under which interest cannot be awarded against the United States unless it has expressly waived its sovereign immunity. We held that while Congress, in making the Federal Government a potential defendant under Title VII of the Civil Rights Act of 1964, had waived the United States’ immunity from suit and from costs including reasonable attorney’s fees, it had not waived the Federal Government’s traditional immunity from any award of interest. We thus held impermissible a 30 percent increase in the “lodestar” fee to compensate for delay in payment. Because we refused to find in the language of Title VII a waiver of the United States’ immunity from interest, Missouri argues, we should likewise conclude that § 1988 is not sufficiently explicit to constitute an abrogation of the States’ immunity under the Eleventh Amendment in regard to any award of interest.
The answer to this contention is already clear from what we have said about Hutto v. Finney. Since, as we held in Hutto, the Eleventh Amendment does not bar an award of attorney’s fees ancillary to a grant of prospective relief, our holding in Shaw has no application, even by analogy. There is no need in this case to determine whether Congress has spoken sufficiently clearly to meet a “clear statement” requirement, and it is therefore irrelevant whether the Eleventh Amendment standard should be, as Missouri contends, as stringent as the one we applied for purposes of the no-interest rule in Shaw. Rather, the issue here — whether the “reasonable attorney’s fee” provided for in § 1988 should be calculated in such a manner as to include an enhancement, where appropriate, for delay in payment — is a straightforward matter of statutory interpretation. For this question, it is of no relevance whether the party against which fees are awarded is a State. The question is what Congress intended — not whether it manifested “the clear affirmative intent ... to waive the sovereign’s immunity.” Shaw, 478 U. S., at 321.
This question is not a difficult one. We have previously explained, albeit in dicta, why an enhancement for delay in payment is, where appropriate, part of a “reasonable attorney’s fee.” In Pennsylvania v. Delaware Valley Citizens’ Council, 483 U. S. 711 (1987), we rejected an argument that a prevailing party was entitled to a fee augmentation to compensate for the risk of nonpayment. But we took care to distinguish that risk from the factor of delay:
“First is the matter of delay. When plaintiffs’ entitlement to attorney’s fees depends on success, their lawyers are not paid until a favorable decision finally eventuates, which may be years later .... Meanwhile, their expenses of doing business continue and must be met. In setting fees for prevailing counsel, the courts have regularly recognized the delay factor, either by basing the award on current rates or by adjusting the fee based on historical rates to reflect its present value. See, e. g., Sierra Club v. EPA, 248 U. S. App. D. C. 107, 120-121, 769 F. 2d 796, 809-810 (1986); Louisville Black Police Officers Organization, Inc. v. Louisville, 700 F. 2d 268, 276, 281 (CA6 1983). Although delay and the risk of nonpayment are often mentioned in the same breath, adjusting for the former is a distinct issue .... We do not suggest . . . that adjustments for delay are inconsistent with the typical fee-shifting statute.” Id., at 716.
The same conclusion is appropriate under § 1988. Our cases have repeatedly stressed that attorney’s fees awarded under this statute are to be based on market rates for the services rendered. See, e. g., Blanchard v. Bergeron, 489 U. S. 87 (1989); Riverside v. Rivera, 477 U. S. 561 (1986); Blum v. Stenson, 465 U. S. 886 (1984). Clearly, compensation received several years after the services were rendered — -as it frequently is in complex civil rights litigation — is not equivalent to the same dollar amount received reasonably promptly as the legal services are performed, as would normally be the case with private billings. We agree, therefore, that an appropriate adjustment for delay in payment— whether by the application of current rather than historic hourly rates or otherwise—is within the contemplation of the statute.
To summarize: We reaffirm our holding in Hutto v. Finney that the Eleventh Amendment has no application to an award of attorney’s fees, ancillary to a grant of prospective relief, against a State. It follows that the same is true for the calculation of the amount of the fee. An adjustment for delay in payment is, we hold, an appropriate factor in the determination of what constitutes a reasonable attorney’s fee under § 1988. An award against a State of a fee that includes such an enhancement for delay is not, therefore, barred by the Eleventh Amendment.
Ill
Missouri’s second contention is that the District Court erred in compensating the work of law clerks and paralegals (hereinafter collectively “paralegals”) at the market rates for their services, rather than at their cost to the attorney. While Missouri agrees that compensation for the cost of these personnel should be included in the fee award, it suggests that an hourly rate of $15—which it argued below corresponded to their salaries, benefits, and overhead—would be appropriate, rather than the market rates of $35 to $50. According to Missouri, § 1988 does not authorize billing paralegals’ hours at market rates, and doing so produces a “windfall” for the attorney.
We begin with the statutory language, which provides simply for “a reasonable attorney’s fee as part of the costs.” 42 U. S. C. § 1988. Clearly, a “reasonable attorney’s fee” cannot have been meant to compensate only work performed personally by members of the bar. Rather, the term must refer to a reasonable fee for the work product of an attorney. Thus, the fee must take into account the work not only of attorneys, but also of secretaries, messengers, librarians, janitors, and others whose labor contributes to the work product for which an attorney bills her client; and it must also take account of other expenses and profit. The parties have suggested no reason why the work of paralegals should not be similarly compensated, nor can we think of any. We thus take as our starting point the self-evident proposition that the “reasonable attorney’s fee” provided for by statute should compensate the work of paralegals, as well as that of attorneys. The more difficult question is how the work of paralegals is to be valuated in calculating the overall attorney’s fee.
The statute specifies a “reasonable” fee for the attorney’s work product. In determining how other elements of the attorney’s fee are to be calculated, we have consistently looked to the marketplace as our guide to what is “reasonable.” In Blum v. Stenson, 465 U. S. 886 (1984), for example, we rejected an argument that attorney’s fees for nonprofit legal service organizations should be based on cost. We said: “The statute and legislative history establish that ‘reasonable fees’ under § 1988 are to be calculated according to the prevailing market rates in the relevant community . . . Id., at 895. See also, e. g., Delaware Valley, 483 U. S., at 732 (O’Connor, J., concurring) (controlling question concerning contingency enhancements is “how the market in a community compensates for contingency”); Rivera, 477 U. S., at 591 (Rehnquist, J., dissenting) (reasonableness of fee must be determined “in light of both the traditional billing practices in the profession, and the fundamental principle that the award of a ‘reasonable’ attorney’s fee under § 1988 means a fee that would have been deemed reasonable if billed to affluent plaintiffs by their own attorneys”). A reasonable attorney’s fee under § 1988 is one calculated on the basis of rates and practices prevailing in the relevant market, i. e., “in line with those [rates] prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation,” Blum, supra, at 896, n. 11, and one that grants the successful civil rights plaintiff a “fully compensatory fee,” Hensley v. Eckerhart, 461 U. S. 424, 435 (1983), comparable to what “is traditional with attorneys compensated by a fee-paying client.” S. Rep. No. 94-1011, p. 6 (1976).
If an attorney’s fee awarded under § 1988 is to yield the same level of compensation that would be available from the market, the “increasingly widespread custom of separately billing for the services of paralegals and law students who serve as clerks,” Ramos v. Lamm, 713 F. 2d 546, 558 (CA10 1983), must be taken into account. All else being equal, the hourly fee charged by an attorney whose rates include paralegal work in her hourly fee, or who bills separately for the work of paralegals at cost, will be higher than the hourly fee charged by an attorney competing in the same market who bills separately for the work of paralegals at “market rates.” In other words, the prevailing “market rate” for attorney time is not independent of the manner in which paralegal time is accounted for. Thus, if the prevailing practice in a given community were to bill paralegal time separately at market rates, fees awarded the attorney at market rates for attorney time would not be fully compensatory if the court refused to compensate hours billed by paralegals or did so only at “cost.” Similarly, the fee awarded would be too high if the court accepted separate billing for paralegal hours in a market where that was not the custom.
We reject the argument that compensation for paralegals at rates above “cost” would yield a “windfall” for the prevailing attorney. Neither petitioners nor anyone else, to our knowledge, has ever suggested that the hourly rate applied to the work of an associate attorney in a law firm creates a windfall for the firm’s partners or is otherwise improper under § 1988, merely because it exceeds the cost of the attorney’s services. If the fees are consistent with market rates and practices, the “windfall” argument has no more force with regard to paralegals than it does for associates. And it would hardly accord with Congress’ intent to provide a “fully compensatory fee” if the prevailing plaintiff’s attorney in a civil rights lawsuit were not permitted to bill separately for paralegals, while the defense attorney in the same litigation was able to take advantage of the prevailing practice and obtain market rates for such work. Yet that is precisely the result sought in this case by the State of Missouri, which appears to have paid its own outside counsel for the work of paralegals at the hourly rate of $35. Record 2696, 2699.
Nothing in § 1988 requires that the work of paralegals invariably be billed separately. If it is the practice in the relevant market not to do so, or to bill the work of paralegals only at cost, that is all that § 1988 requires. Where, however, the prevailing practice is to bill paralegal work at market rates, treating civil rights lawyers’ fee requests in the same way is not only permitted by § 1988, but also makes economic sense. By encouraging the use of lower cost paralegals rather than attorneys wherever possible, permitting market-rate billing of paralegal hours “encourages cost-effective delivery of legal services and, by reducing the spiraling cost of civil rights litigation, furthers the policies underlying civil rights statutes.” Cameo Convalescent Center, Inc. v. Senn, 738 F. 2d 836, 846 (CA7 1984), cert. denied, 469 U. S. 1106 (1985).
Such separate billing appears to be the practice in most communities today. In the present case, Missouri concedes that “the local market typically bills separately for paralegal services,” Tr. of Oral Arg. 14, and the District Court found that the requested hourly rates of $35 for law clerks, $40 for paralegals, and $50 for recent law graduates were the prevailing rates for such services in the Kansas City area. App. to Pet. for Cert. A29, A31, A34. Under these circumstances, the court’s decision to award separate compensation at these rates was fully in accord- with § 1988.
I — I
The courts below correctly granted a fee enhancement to compensate for delay in payment and approved compensation of paralegals and law clerks at market rates. The judgment of the Court of Appeals is therefore
Affirmed.
Justice Marshall took no part in the consideration or decision of this case.
Section 1988 provides in relevant part: “In any action or proceeding to enforce a provision of sections 1981, 1982,1983, 1985, and 1986 of this title, title IX of Public Law 92-318 [20 U. S. C. § 1681 et seq.], or title VI of the Civil Rights Act of 1964 [42 U. S. C. §2000d et seq.], the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.”
The holding of the Court of Appeals on this point, 838 F. 2d, at 265-266, is in conflict with the resolution of the same question in Rogers v. Okin, 821 F. 2d 22, 26-28 (CA1 1987), cert. denied sub nonz. Commissioner, Massachusetts Dept, of Mental Health v. Rogers, 484 U. S. 1010 (1988).
Our opinion in Shaiu does, to be sure, contain some language that, if read in isolation, might suggest a different result in this case. Most significantly, we equated compensation for delay with prejudgment interest, and observed that “[p]rejudgment interest... is considered as damages, not a component of ‘costs.’ . . . Indeed, the term ‘costs’ has never been understood to include any interest component.” Library of Congress v. Shaiu, 478 U. S. 310, 321 (1986). These observations, however, cannot be divorced from the context of the special “no-interest rule” that was at issue in Shaw. That rule, which is applicable to the immunity of the United States and is therefore not at issue here, provides an “added gloss of strictness,” id., at 318, only where the United States’ liability for interest is at issue. Our inclusion of compensation for delay within the definition of prejudgment interest in Shaiu must be understood in light of this broad proscription of interest awards against the United States. Shaw thus does not represent a general-purpose definition of compensation for delay that governs here. Outside the context of the “no-interest rule” of federal immunity, we see no reason why compensation for delay cannot be included within § 1988 attorney’s fee awards, which Hutto held to be “costs” not subject to Eleventh Amendment strictures.
We cannot share Justice O’Connor’s view that the two cases she cites, post, at 293, demonstrate the existence of an equivalent rule relating to state immunity that embodies the same ultrastrict rule of construction for interest awards that has grown up around the federal no-interest rule. Cf. Shaiu, supra, at 314-317 (discussing historical development of the federal no-interest rule).
In Shaio, which dealt with the sovereign immunity of the Federal Government, there was of course no prospective-retrospective distinction as there is when, as in Hutto and the present case, it is the Eleventh Amendment immunity of a State that is at issue.
Delaware Valley was decided under § 304(d) of the Clean Air Act, 42 U. S. C. § 7604(d). We looked for guidance, however, to § 1988 and our cases construing it. Pennsylvania v. Delaware Valley Citizens’ Council, 483 U. S. 711, 713, n. 1 (1987).
The Courts of Appeals have taken a variety of positions on this issue. Most permit separate billing of paralegal time. See, e. g., Save Our Cumberland Mountains, Inc. v. Hodel, 263 U. S. App. D. C. 409, 420, n. 7, 826 F. 2d 43, 54, n. 7 (1987), vacated in part on other grounds, 273 U. S. App. D. C. 78, 857 F. 2d 1516 (1988) (en banc); Jacobs v. Mancuso, 825 F. 2d 559, 563, and n 6 (CA1 1987) (collecting cases); Spanish Action Committee of Chicago v. Chicago, 811 F. 2d 1129, 1138 (CA7 1987); Ramos v. Lamm, 713 F. 2d 546, 558-559 (CA10 1983); Richardson v. Byrd, 709 F. 2d 1016, 1023 (CA5), cert. denied sub nom. Dallas County Commissioners Court v. Richardson, 464 U. S. 1009 (1983). See also Riverside v. Rivera, 477 U. S. 561, 566, n. 2 (1986) (noting lower court approval of hourly rate for law clerks). Some courts, on the other hand, have considered paralegal work “out-of-pocket expense,” recoverable only at cost to the attorney. See, e. g., Northcross v. Board of Education of Memphis City Schools, 611 F. 2d 624, 639 (CA6 1979), cert. denied, 447 U. S. 911 (1980); Thornberry v. Delta Air Lines, Inc., 676 F. 2d 1240, 1244 (CA9 1982), vacated, 461 U. S. 952 (1983). At least one Court of Appeals has refused to permit any recovery of paralegal expense apart from the attorney’s hourly fee. Abrams v. Baylor College of Medicine, 805 F. 2d 528, 535 (CA5 1986).
This delay, coupled with the fact that, as we recognized in Delaivare Valley, the attorney’s expenses are not deferred pending completion of the litigation, can cause considerable hardship. The present case provides an illustration. During a period of nearly three years, the demands of this case precluded attorney Benson from accepting other employment. In order to pay his staff and meet other operating expenses, he was obliged to borrow $633,000. As of January 1987, he had paid over $113,000 in interest on this debt, and was continuing to borrow to meet interest payments. Record 2336-2339; Tr. 130-131. The LDF, for its part, incurred deficits of $700,000 in 1983 and over $1 million in 1984, largely because of this case. Tr. 46. If no compensation were provided for the delay in payment, the prospect of such hardship could well deter otherwise willing attorneys from accepting complex civil rights cases that might offer great benefit to society at large; this result would work to defeat Congress’ purpose in enacting § 1988 of “encourag[ing] the enforcement of federal law through lawsuits filed by private persons.” Delaware Valley, supra, at 737 (Blackmun, J., dissenting).
We note also that we have recognized the availability of interim fee awards under § 1988 when a litigant becomes a prevailing party on one issue in the course of the litigation. Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782, 791-792 (1989). In economic terms, such an interim award does not differ from an enhancement for delay in payment.
The attorney who bills separately for paralegal time is merely distributing her costs and profit margin among the hourly fees of other members of her staff, rather than concentrating them in the fee she sets for her own time.
A variant of Missouri’s “windfall” argument is the following: “If paralegal expense is reimbursed at a rate many times the actual cost, will attorneys next try to bill separately — and at a profit — for such items as secretarial time, paper clips, electricity, and other expenses?” Reply Brief for Petitioners 15-16. The answer to this question is, of course, that attorneys seeking fees under § 1988 would have no basis for requesting separate compensation of such expenses unless this were the prevailing practice in the local community. The safeguard against the billing at a profit of secretarial services and paper clips is the discipline of the market.
It has frequently been recognized in the lower courts that paralegals are capable of carrying out many tasks, under the supervision of an attorney, that might otherwise be performed by a lawyer and billed at a higher rate. Such work might include, for example, factual investigation, including locating and interviewing witnesses; assistance with depositions, interrogatories, and document production; compilation of statistical and financial data; checking legal citations; and drafting correspondence. Much such work lies in a gray area of tasks that might appropriately be performed either by an attorney or a paralegal. To the extent that fee applicants under § 1988 are not permitted to bill for the work of paralegals at market rates, it would not be surprising to see a greater amount of such work performed by attorneys themselves, thus increasing the overall cost of litigation.
Of course, purely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who performs them. What the court in Johnson v. Georgia Highway Express, Inc., 488 F. 2d 714, 717 (CA5 1974), said in regard to the work of attorneys is applicable by analogy to paralegals: “It is appropriate to distinguish between legal work, in the strict sense, and investigation, clerical work, compilation of facts and statistics and other work which can often be accomplished by non-lawyers but which a lawyer may do because he has no other help available. Such non-legal work may command a lesser rate. Its dollar value is not enhanced just because a lawyer does it.”
Amicus National Association of Legal Assistants reports that 77 percent of 1,800 legal assistants responding to a survey of the association’s membership stated that their law firms charged clients for paralegal work on an hourly billing basis. Brief for National Association of Legal Assistants as Amicus Curiae 11.
Question: Did the the decision of the court overrule one or more of the Court's own precedents?
A. Yes
B. No
Answer:
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songer_usc1
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29
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited title of the U.S. Code in the headnotes to this case. Answer "0" if no U.S. Code titles are cited. If one or more provisions are cited, code the number of the most frequently cited title.
NATIONAL LABOR RELATIONS BOARD, Petitioner, v. GENERAL WAREHOUSE CORPORATION, Respondent.
No. 80-1472.
United States Court of Appeals, Third Circuit.
Argued Dec. 1, 1980.
Decided March 10, 1981.
Joseph Schwachter (argued), Elliott Moore, Paul J. Spielberg, William A. Lubbers, John E. Higgins, Jr., Robert E. Allen, Washington, D.C., for petitioner.
Herbert New (argued), Brenner, New & Brenner, Livingston, N.J., for respondent.
Before ALDISERT, HUNTER and HIGGINBOTHAM, Circuit Judges.
OPINION OF THE COURT
JAMES HUNTER, III, Circuit Judge:
The National Labor Relations Board (hereinafter the “Board”) petitions this court for enforcement of its February 14, 1980 order against General Warehouse Corporation (hereinafter the “Company”). The Board found General Warehouse in violation of sections 8(a)(1) and (3) of the National Labor Relations Act (hereinafter the “Act”) for retaliating against its employee, John Coon, for engaging in protected union activities. It therefore ordered respondent, General Warehouse, to cease and desist from its unfair labor practices and to reinstate Coon with back pay. Respondent contends that the Board’s order should not be enforced because the Board failed to defer to an arbitrator’s award that ruled that there was “just cause” for Coon’s dismissal; alternatively, respondent argues that there is insufficient evidence on the record to support the Board’s findings. We hold that because the arbitrator’s decision addressed only the contractual questions in the dispute and not the statutory issues brought before the Board, it was not an abuse of discretion for the Board to refuse to defer to the arbitrator. We also conclude that there is substantial evidence on the record to support the Board’s unfair labor practices findings. Accordingly, we will enforce the Board’s order.
FACTS
The events leading to the unfair labor practices in this case began in January, 1978. At that time, General Warehouse’s Executive Vice-President, Philip Fine, held a meeting with the Company’s employees. He asked the employees to waive their contractual right to bid on work to be performed in a new warehouse. John Coon, a warehouseman for General Warehouse, attended the meeting but did not participate in the discussion. After the meeting, Fine approached Coon and asked him to “speak to the men and try to get across to them how important it was that [they] agree to [give] up the bid.” Coon declined. He had battled with the Company before in a 1976 campaign to collect contractual wage increases that the employees had been persuaded to waive. When he told Fine that he would again oppose the Company, Fine informed Coon that the Company considered him to be a “troublemaker” and “instigator.”
Soon thereafter, in March, 1978, the President of General Warehouse, Michael Goldfarb, called another meeting of the warehouse employees. He told them that due to the high cost of energy and the Company’s poor financial condition, he could not afford to pay the 38-cent-an-hour cost of living increase provided for under the collective bargaining agreement. He asked the employees to waive the increase due to take effect on April 1, 1978. Goldfarb said he had owned a company in the past where he had labor trouble, that he had closed the business, and that he could do it again. He also told the employees that if they did not waive the cost of living increase due to them, he would close down the Company and open elsewhere.
At least five employees, including Coon, spoke out against waiving the increase. Coon said that the employees were also suffering from inflation and that they were not to be blamed for the Company’s unfavorable position with its competitors. He insisted that Goldfarb live up to the contract he had signed.
Coon continued to voice his opposition to a waiver of the cost of living increase through the end of March. On March 30 or 31, the Company polled the employee units on their position. The waiver proposal was defeated.
Immediately upon the defeat of the waiver issue, General Warehouse changed its work assignment policy. Ordinarily, General Warehouse would assign employees to unload Wrigley freight cars, an arduous job described as the “least desirable assignment at the plant,” on a rotational basis. After its waiver issue was defeated, the Company arbitrarily selected the employees for the job. It assigned Coon to the Wrigley work on April 3,1978 and April 4,1978. On April 5, 1978, Coon called in sick. He was discharged that same day for excessive absenteeism.
The evidence shows that Coon did not have a model attendance record. At one time, he had been absent 18% of his working days; at another, he was sent a warning that his absence five Fridays out of seven was unsatisfactory. The ALJ in his opinion carefully details Coon’s attendance record. We agree with his conclusion that “[the fact that Coon] was absent a considerable number of times is amply supported by the record.” AU’s Decision at 7, reprinted in Appendix at 224. We also agree, however, and will discuss below, that merely “because justifiable grounds for discharge existed, it does not necessarily follow [that] such was the motivating reason [for the dismissal].” Id.
PROCEDURAL HISTORY
The Union filed a grievance with General Warehouse on behalf of Coon, alleging that his discharge had been in retaliation for his union activities and did not constitute “just cause” under the collective bargaining agreement. In accordance with the collective bargaining agreement, the parties submitted their dispute to arbitration. The arbitrator heard argument on the possible motives for Coon’s discharge, but made no finding on whether the discharge was based, even in part, on General Warehouse’s hostility toward Coon’s union activities. Rather, the arbitrator focused only on Coon’s behavior and found that his excessive absenteeism was “just cause” under the collective bargaining agreement for his dismissal.
After the arbitrator’s decision, Coon filed a complaint with the Board alleging that respondent interfered with the exercise of his section 7 rights (a section 8(a)(1) violation) and discriminated against him in his tenure and condition of employment (a section 8(a)(3) violation). A hearing was held before an Administrative Law Judge (hereinafter “AU”) on February 21, 1979. The ALJ, declining to defer to the arbitrator’s decision, concluded that Respondent had engaged in the alleged unfair labor practices. Accordingly, he recommended that General Warehouse be ordered to cease and desist from its discriminatory acts and reinstate Coon with backpay. The Board summarily adopted the ALJ’s order.
DISCUSSION
Our decision on whether to enforce the Board’s order turns on two important issues. First, we must decide whether the Board properly refused to defer to the arbitrator’s decision in this case. Second, if we hold that the Board did not abuse its discretion in refusing to defer, NLRB v. Pincus Bros., Inc.—Maxwell, 620 F.2d 367, 372 (3d Cir. 1980), we must determine whether there is substantial evidence on the record to support the Board’s finding that respondent violated sections 8(a)(1) and (3) of the Act. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 491, 492-96, 71 S.Ct. 456, 464, 466, 467-68, 95 L.Ed. 456 (1951).
I.
In Spielberg Manufacturing Co., 112 N.L.R.B. 1080 (1955), the Board set forth its standards for deferring to arbitrators’ awards. It stated that it would defer to an arbitrator’s award if: (1) the proceedings have been fair and regular; (2) the parties agreed to be bound; and (3) the decision was not “clearly rfepugnant” to the purposes and policies of the Act. Spielberg, 112 N.L.R.B. at 1082. The parties have stipulated to the first two of these requirements. The Board refused to defer because it found that the third requirement had not been met. Although we agree with the Board’s conclusion that it was not required to defer in this case, we choose to base our decision on a fourth requirement — a prerequisite to the Spielberg standards — articulated by the Board in Raytheon Co., 140 N.L.R.B. 883 (1963), enforcement denied on other grounds, 326 F.2d 471 (1st Cir. 1964).
In Raytheon Co., the Board held that it would not defer to an arbitrator’s decision if the arbitrator failed to consider .and rule on the unfair labor practice issue. See also Max Factor & Co., 239 N.L.R.B. 804 n.3 (1978) (noting that both the Board and the courts have taken the position that the Board should not defer when the arbitrator has not considered the statutory issues). The Board found that
It manifestly could not encourage the voluntary settlement of disputes or effectuate the policies and purposes of the Act to give binding effect in an unfair labor practice proceeding to an arbitration award which does not purport to resolve the unfair labor practice issue which was before the arbitrator and which is the very issue the Board is called upon to decide in the proceeding before it.
Raytheon, 140 N.L.R.B. at 884, quoting Monsanto Chemical, 130 N.L.R.B. 1097, 1099 (1961). We agree with the Ninth Circuit that
It is illogical for the Board, which is responsible for resolving the unfair labor practice issue, to defer to a decision by an arbitrator, who is under no duty and indeed may not be particularly predisposed to consider the statutory issue, solely on the basis of a factually unfounded presumption that the arbitrator had considered the issue.
Stephenson v. NLRB, 550 F.2d 535, 540 (9th Cir. 1977). Rather, in order for the Board’s deferral policy riot to be one of abdication, the Board must be presented with some evidence that the statutory issue has actually been decided.
In applying the fourth deferral requirement — that the arbitrator consider the statutory issue and rule on it or all the facts required to decide it — to the facts of the instant case, we find that the Board refused to defer to the arbitrator’s decision, not because it disagreed with the arbitrator’s finding that excessive absenteeism constituted “just cause” under the collective bargaining agreement for discharge, but because the arbitrator did not rule on whether there may have been other grounds for the discharge. The arbitrator’s decision only discussed Coon’s poor attendance record and whether his excessive absenteeism constituted “just cause” under the collective bargaining agreement for his discharge. The arbitrator could, and apparently did, make his decision without considering the Company’s other possible motives for discharging Coon. These other motives, if found to be discriminatory and the “real cause” of Coon’s dismissal, could form the basis of an unfair labor practices charge.
Therefore, we cannot find that the Board abused its discretion by refusing to defer to the arbitrator’s award. Since the Board did not have the aid of an arbitrator's decision addressing the alleged discriminatory motive, it was required to make a determination itself. We now examine its decision.
II.
The Board found that General Warehouse violated sections 8(a)(1) and (3) of the Act by assigning Coon to the “Wrigley work” in retaliation for his protests against the Company’s waiver proposal. Coon’s protests at the March, 1978 meeting were protected as concerted activity, see Hugh H. Wilson Corp. v. NLRB, 414 F.2d 1345, 1348 (3d Cir.), cert. denied, 397 U.S. 935, 90 S.Ct. 943, 25 L.Ed.2d 115 (1969), under section 7 of the Act. Section 8(a)(1), 29 U.S.C. § 158(a)(1) (1976), of the Act safeguards Section 7’s guarantee by providing that “It shall be an unfair labor practice for an employer — to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [section 7] of this title.. .. ” Section 8(a)(3) adds to this protection by holding that: “It shall be an unfair labor practice for an employer by discrimination in regard to hire or tenure of employment or any term or condition of employment to ... discourage membership in any labor organization.. .. ” 29 U.S.C. § 158(a)(3) (1976). The Board found General Warehouse in violation of both of these provisions.
We are limited in our review of National Labor Relations Board decisions. If the Board’s findings are supported by substantial evidence on the record, we are obliged to enforce them. Universal Camera, 340 U.S. at 488, 491, 492-96, 71 S.Ct. at 464, 466, 467-68. We are also bound to respect the Board’s conclusions on credibility and conflicting evidence if they take into account all relevant factors and are sufficiently explained. NLRB v. Walton Mfg. Co., 369 U.S. 404, 405, 82 S.Ct. 853, 854, 7 L.Ed.2d 829 (1962); NLRB v. New York — Keansburgh Long Branch Bus Co., Inc., 578 F.2d 472, 478 n.15 (3d Cir. 1978). Bound by this standard, and based upon our independent review of the record, we conclude that there is substantial evidence to support the Board’s order.
The record shows that in January, 1978 a Company representative warned Coon that he was considered to be an “instigator” and “troublemaker” because of his 1976 efforts to secure employee benefits. In March, 1978, when Coon had an opportunity to redeem himself with the Company, he instead chose to fight its cost of living increase waiver proposal. On March 30, immediately after its waiver proposal had been defeated, the Company announced that employees would no longer be granted working time to cash paychecks and that the rotation system for “Wrigley work” assignments would be changed to one in which the employer could arbitrarily pick employees to be saddled with the unpleasant task.
Considering this setting, the Board found that the mood and timing of Coon’s assignment to “Wrigley work” supported the charges of discrimination. The ALJ wrote:
[Coon] had been a vociferous opponent to waiving the cost of living increase at the meeting conducted by Goldfarb in early March. The Respondent also was aware he had been instrumental in retaining an attorney about 2 years before to attempt to collect wages due to the employees under the collective bargaining contract. Although not exempt from Wrigley assignments, I am of the view the assignment of the Wrigley work to Coon on the heels of the employees’ rejection of the Respondent’s request they waive the cost of living increase was in retaliation for such rejection.
ALJ’s Decision at 6-7, reprinted in Appendix at 223-224.
Although we might make a different decision if we were to decide the case de novo, as stated earlier, we must defer to the Board’s decision if it is substantially supported by the record. Universal Camera, 340 U.S. at 488, 71 S.Ct. at 464. As described above, there is such support. The ALJ could reasonably infer from the evidence that Coon was assigned to the Wrigley work, three days in a row, because of his opposition to the Company’s waiver proposal. He was further justified in finding that the Company’s action was designed to coerce Coon and the other employees into accepting future waiver proposals. Accordingly, we hold that there is substantial evidence on the record to find that Coon’s assignment to the Wrigley work was a violation of sections 8(a)(1) and 8(a)(3) of the Act.
The Board also found that General Warehouse violated section 8(a)(1) and 8(a)(3) of the Act by discharging Coon in retaliation for his opposition to the waiver proposal. As this Court wrote in Edgewood Nursing Center, Inc. v. NLRB, 581 F.2d 363, 368 (3d Cir. 1978): “Whether the employer’s discharge of an employee violates section 8(a)(1) and 8(a)(3) of the Act depends on the employer’s motive. N. L. R. B. v. Brown, 380 U.S. 278, 283, 85 S.Ct. 980 [983] 13 L.Ed.2d 839 (1965); N. L. R. B. v. Eagle Material Handling, Inc., 558 F.2d 160, 169 (3d Cir. 1977).”
General Warehouse contends that Coon was discharged because of his excessive absenteeism. The Board takes the position that Coon was discharged because of his opposition to the Company’s waiver proposal.
Our goal is to find the “real motive,” NLRB v. Brown, 380 U.S. at 287, 85 S.Ct. at 985; NLRB v. Gentithes, 463 F.2d 557, 560 (3d Cir. 1972) or “real cause,” NLRB v. Rubber Rolls, Inc., 388 F.2d 71, 74 (3d Cir. 1967) for Coon’s dismissal. In Edgewood Nursing, we were faced with a similar problem. The Board contended that the employee had been unlawfully discharged because of her union activities. The employer, on the other hand, alleged that its nurse had been dismissed because she had made serious medication errors. In deciding which explanation to accept, this court proposed the following test for dealing with “dual-motive” cases:
If two or more motives are behind a discharge, the action is an unfair labor practice if it is partly motivated by reactions to the employee’s protected activity.... On the other hand, if the employee would have been fired for cause irrespective of the employer’s attitude toward the union, the real reason for the discharge is non-discriminatory. In that circumstance there is no causal connection of any anti-union bias and the loss of the job.... Thus, if the employer puts forward a justifiable cause for discharge of the employee, the Board must find that the reason was a pretext, and that anti-union sentiment played a part in the decision to terminate the employee’s job.
Edgewood Nursing, 581 F.2d at 368 (citations omitted).
The Edgewood standard is designed to be applied on a case-by-case basis. While in several of our recent cases we have applied this standard and found that there is not substantial evidence to support the unfair labor charge, we cannot come to the same conclusion here. In the case before us, the ALJ details why he found Coon’s excessive absenteeism to be a mere pretext for his dismissal. Although the pressure against Coon to improve his attendance record had been mounting for a while, General Warehouse chose to dismiss Coon at the very moment when his discharge would have the maximum coercive and punitive effect. The Company took absences that had previously been condoned and used them as a reason for dismissing Coon. When General Warehouse finally “lowered the boom” on Coon, it did not give him a chance to explain his absences. If it had, it would have found evidence of a possible legitimate excuse for his absence on the day he was discharged.
Once again, although we might have decided the case differently de novo, there is substantial evidence on the record to support the Board’s finding that the Company’s hostility towards Coon’s protected activities was the “real cause” for his dismissal. The timing of Coon’s discharge, the Company’s previous attitude toward him and his union efforts, and the almost reflexive resort by the Company to Coon’s past attendance record all support the Board’s conclusion.
There will necessarily be “close calls” in cases involving a discharge alleged to be in violation of section 8(a)(1) and 8(a)(3). This case is one of them. However, in light of the extensive record compiled by the Board, its credibility findings and our own reading of the evidence, we find that General Warehouse would not have discharged Coon when it did if it were not for his opposition to their waiver proposal.
Accordingly, we will enforce the Board’s decision ordering General Warehouse to cease and desist from its unfair labor practices and to reinstate John Coon with back pay.
. The Board’s order is reported at 247 NLRB No. 142 (1980), reprinted in Appellant’s Appendix at 231-33.
. 29 U.S.C. § 158(a)(1), (3) (1976).
. Under a collective bargaining agreement between General Warehouse and the warehouse employees, employees were entitled to bid for transfers to different warehouses according to their seniority. At the January, 1978 meeting Fine informed the employees that a prospective customer wanted to “hand pick” his warehouse workers and would be more likely to lease the warehouse from General Warehouse if the Company were to release him, with the approval of the employees, from the terms of the collective bargaining agreement.
. The ALJ was unclear on whether the stewards’ poll was conducted on March 30 or 31. See ALJ’s Decision at 6 n. 14, reprinted in Appendix at 223.
. ALJ’s Decision at 6, reprinted in Appendix at 223. See also Transcript of ALJ proceedings, reprinted in Appendix at 101-02. Prior to 1976, the Company had used this assignment as a form of punishment for employees who, for one reason or another, had fallen into disfavor with the Company. Transcript of ALJ proceedings, reprinted in Appendix at 41, 78. In 1976, upon the Union’s request, the Company agreed to rotate this work among the ware-housemen. See ALJ’s Decision at 6, reprinted in Appendix at 223.
. ALJ’s Decision at 7-8, reprinted in Appendix at 224-25.
. See Arbitrator’s decision, reprinted in Appendix at 181(b)-181(e) & note 19 infra.
. 29 U.S.C. § 157 (1976). See note 22 infra.
. See also Hawaiian Hauling Service, Ltd. v. NLRB, 545 F.2d 674, 676 (9th Cir.), cert. denied, 431 U.S. 965, 97 S.Ct. 2921, 53 L.Ed.2d 1061 (1976) (“abuse of discretion” standard of review).
. These standards bind the Board and this court. Although the Board’s policy of deferral is a “discretionary administrative doctrine,” see Pincus, 620 F.2d at 372 n.8, once the Board “announce(s) a policy regarding deference to arbitration, (it cannot) blithely ignore it, thereby leading astray litigants who depended on it.” NLRB v. Horn & Hardart Co., 439 F.2d 674, 679 (2d Cir. 1971). Accordingly, we believe it proper to use the Board’s own standards to gauge whether it abused its discretion in refusing to defer. See Hawaiian Hauling, 545 F.2d at 676.
. The Spielberg requirements were designed to achieve the “desirable objective of encouraging the voluntary settlement of labor disputes....” Spielberg, 112 N.L.R.B. at 1082. Since its introduction, arbitration has served to promote industrial peace and stability by encouraging the private resolution of disputes. See generally. International Harvester, 138 N.L. R.B. 923 (1962); Murphy & Sterlacci, A Review of the National Labor Relations Board’s Deferral Policy, 42 Ford L.Rev. 291 (19.73). Correspondingly, the courts continue to support the Board’s deferral policy. See Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 271, 84 S.Ct. 401, 409, 11 L.Ed.2d 320 (1963); NLRB v. Pincus Bros., Inc.—Maxwell, 620 F.2d 367, 372-74 (3d Cir. 1980).
. Several courts have chosen to integrate this fourth requirement from Raytheon into their analysis of whether the third Spielberg requirement has been met. These courts hold that the arbitrator’s failure to consider and rule on the statutory issue actually leads to a decision clearly repugnant to the Act and thus a failure to meet the third Spielberg requirement. See, e. g., Bloom v. NLRB, 603 F.2d 1015 (D.C.Cir. 1979); Dreis & Krump Mfg. Co., Inc., 544 F.2d 320 (7th Cir. 1976); Banyard v. NLRB, 505 F.2d 342 (D.C.Cir. 1974). We decline to follow this mode of analysis both because we want to emphasize the importance of this separate requirement, see Pincus, 620 F.2d at 372 n.7 (Raytheon requirement noted as an added requirement to those in Spielberg) and because the history of the third Spielberg requirement suggests that it was intended to cover the more specific situation where the arbitrator’s decision, on its face, conflicts with the Act. See generally R. Gorman, Basic Text On Labor Law 736-37 (1976).
. The Board has recently reaffirmed this requirement in Suburban Motor Freight, Inc., 247 N.L.R.B. No. 2 (Jan. 8, 1980), eliminating any doubt that a finding of just cause does not automatically dispose of a claim of discriminatory motive.
. See note 16 infra.
. Regardless of its deferral policy, the Board retains the primary responsibility and power to adjudge unfair labor practices. Section 10(a) of the Act, 29 U.S.C. § 160(a) (1976). See also Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 271, 84 S.Ct. 401, 409, 11 L.Ed.2d 320 (1964).
. The Board’s fourth requirement will be deemed met “[i]f there is substantial and definite proof that the unfair labor practice issue and evidence were expressly presented to the arbitrator and [that] the arbitrator’s decision indisputably resolve[d] the [unfair labor practice] issue....” Stephenson, 550 F.2d at 538 n.4 (emphasis added). If “the arbitrator’s decision is ambiguous as to the resolution of the statutory issue, [we must hold that] the ‘clearly decided requirement has not been met.’ ” Id.
. See Pincus, 620 F.2d at 372 n.7. See also St. Luke’s Memorial Hospital, Inc. v. NLRB, 623 F.2d 1173, 1178-79 (7th Cir. 1980) (finding of “just cause” for discharge does not dispose of issue of discriminatory motive); Bloom v. NLRB, 603 F.2d 1015, 1020 (D.C.Cir. 1979) (“pT]he record must yield clear indication that the arbitration panel specifically dealt with the issues underlying the unfair labor charge.... ”); Stephenson, 550 F.2d at 538 ([B]efore deferral can be held proper ... the arbitral tribunal must have clearly decided the unfair labor practice issue which the Board is later urged to give deference.... ”).
. The arbitrator wrote:
ISSUE SUBMITTED
Was there just cause under the terms and conditions of the collective bargaining agreement for the discharge of John Coon? If not, what shall the remedy be?
NATURE OF THE CASE
. The grievant was terminated by the Company on the grounds of excessive absenteeism following a progression of discipline which included a written warning and a suspension for absenteeism. The Union grieved the termination, and the parties being unable to resolve their dispute, the Union sought arbitration.
DISCUSSION
Among the primary obligations of an employee is the duty to present himself for work on a reliable, dependable basis. Although every worker falls prey to illnesses which make occasional absences unavoidable, excessive absenteeism disrupts the ability of the Company to function effectively and thereby reduces the job security of all employees. Although it is unfortunate indeed that the grievant experienced debilitating back problems after a few difficult assignments, his record reflects many more absences than could reasonably be tolerated. The impact of this level of absenteeism was compounded by the failure of the grievant on many occasions to reach the proper Company official in order to report his absence in a timely manner.
The Company had alerted the grievant to its dissatisfaction with his attendance record through a series of increasingly severe disciplinary sanctions in keeping with the well-accepted tenets of progressive discipline which endeavor to make employees more secure in their jobs by alerting them to their employer’s dissatisfaction in time to correct their behavior and avoid being discharged.
Several warning letters followed by a suspension served without appeal after it had been reduced in length through Union intervention gave the grievant ample warning of the imminence, of termination unless his attendance record improved. There is no record of such improvement. Therefore, based on the clear thrust of the facts in evidence and the credible testimony, there was just cause for the discharge of John Coon. The grievance is denied.
. We are also concerned that even if the arbitrator did implicitly decide the statutory issue, . he did so by using the wrong legal standard. “Just cause” is to be determined by the terms of the collective bargaining agreement. The arbitrator may or may not take into account all motives for the discharge. Section 8(a)(1) and (3) violations, on the other hand, are to be adjudged in accordance with judicial standards and must take into account both the employer’s justifiable cause to discharge the employee and its possible discriminatory motive. See text accompanying notes 24-27 infra. See also Banyard v. NLRB, 505 F.2d 342, 348 (D.C.Cir. 1974); Note, 88 Harv.L.Rev. 804, 808 (1975). Without a specific mention in the arbitrator’s decision to the other possible motives for Coon’s discharge, this court must assume, as did the Board, that the arbitrator’s decision was based on the narrow, one-sided focus of the contract’s “just cause” standard. Cf. Alexander v. Gardner-Denver Co., 415 U.S. 36, 56-57, 94 S.Ct. 1011, 1023-24, 39 L.Ed.2d 147 (1974) (The court noted that the arbitrator’s primary duty is to effectuate the intent of the parties to the contract rather than the requirements of law).
. Our decision in the instant case is consistent with this court’s recent holding in NLRB v. Pincus, 620 F.2d 367 (3d Cir. 1980). In Pincus, this court held that the Board was required to defer because the arbitrator’s decision was arguably consistent with the Act. In that case, the statutory issues were whether an employee was terminated for writing and distributing a leaflet and whether that activity was protected under the Act. The arbitrator discussed all the facts relevant to these issues, found that the leaflet activity was one cause of the employee’s discharge, but found that the conduct fell outside the limits of the Act’s protection; he therefore upheld the discharge. The Board, relying on the same facts as did the arbitrator, concluded that the employee’s leaflet activity was protected and thus refused to defer.
By contrast, in the instant case there was neither a ruling on the unfair labor practice issue nor any indication in the arbitrator’s decision that he even considered the statutory issue. Rather, it appears from the arbitrator’s opinion that his decision on the contractual issue was based solely on Coon’s conduct, without reference to the employer’s other possible motives for the discharge.
Furthermore, contrary to respondent’s suggestion, our decision does not conflict with the Ninth Circuit’s judgment in Douglas Aircraft Co. v. NLRB, 609 F.2d 352 (9th Cir. 1979). As distinguished from the arbitrator’s decision in Douglas, the arbitrator’s decision in the instant case did not refer to all of the employer’s possible motives for the discharge. Consequently, there is no reasonable basis for holding that the arbitrator must have implicitly found them to be the “real cause” and not pretexts for Coon’s dismissal.
. Section 7 of the Act, 29 U.S.C. § 157 (1976) provides, “Employees shall have the right ... to engage in other concerted activities for the purposes of collective bargaining or [their] other mutual aid or protection. .. . ”
. Coon was assigned to the “Wrigley work” just two working days after the steward’s poll.
. See, e.g., Stein Seal Co. v. NLRB, 605 F.2d 703, 709 (3d Cir. 1979); Edgewood, 581 F.2d at 366-71.
. ALJ’s Decision at 7, reprinted in Appendix at 225. Although the ALJ does not use the term “pretext,” his statement, “I am convinced Coon was discharged, not for his absences, but in retaliation for the opposition by the employees to waive the cost of living increase and Coon’s known participation in such rejection” may be considered an equivalent statement.
. See ALJ’s Decision at 7, reprinted in Appendix at 224.
. See ALJ Decision at 8, reprinted in Appendix at 225 (ALJ, crediting Mrs. Coon’s credibility over that of respondent’s warehouse manager, found that the Company had been informed of Coon’s medical excuse for being absent on the day he was discharged). See also General Counsel Exhibit 11, reprinted in Appendix at 214. Respondent’s January 4, 1977 letter acknowledging that Coon had been under a doctor’s order not to work.
. See ALJ’s Decision at 8, reprinted in Appendix at 225.
. See complete text of ALJ’s Recommended Order, adopted by the Board, reprinted in Appendix at 228-29.
Question: What is the most frequently cited title of the U.S. Code in the headnotes to this case? Answer with a number.
Answer:
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songer_genapel1
|
G
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed appellant.
BRITT v. COMMISSIONER OF INTERNAL REVENUE.
No. 4632.
Circuit Court of Appeals, Fourth Circuit.
Aug. 14, 1940.
Robert A. Littleton, of Washington, D, C., for petitioner.
Lee A. Jackson, Sp. Asst, to the Atty, Gen. (Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key, Sp. Asst, to the Atty. Gen., on the brief), for respondent.
Before PARKER, SOPER, and DOB1E, Circuit Judges.
SOPER, Circuit Judge.
In order to decide this case, we must determine the basis for computing the gain realized by the taxpayer in 1934 from the redemption of 72 shares of preferred stock of United Carbon Company at $110 per share. The taxpayer acquired the stock in 1925 in the course of a liquidation distribution of the assets of the Liberty Carbon Company, of which he was a stockholder. In the latter year, the Liberty Carbon Company and a number of other corporations, engaged in the manufacture of carbon black, transferred their assets to the United Carbon Company, the inventories for cash and the other assets in exchange for shares of preferred and no-par common stock of the transferee. Thereafter the Liberty Carbon Company was dissolved and the taxpayer received in liquidation 72 shares of the preferred and 288 shares of the common stock of the United Carbon Company. The preferred stock at the time had a fair market value of $100 per share and the common stock, $26.88 per share.
The taxpayer adopted $7,200 as the basis for computing the gain from the redemption of the preferred stock in 1934, and reported a gain of $720. But the Commissioner of Internal Revenue asserted, and the Board of Tax Appeals held, that the true basis was a proportionate part of the basis of the assets of the Liberty Carbon Company, for which the stock of the - United Carbon Company was exchanged. Computing the profit on this basis, the Commissioner determined a deficiency of $933.12.
The Board’s decision was grounded upon the theory that the transaction in 1925, wherein the United Carbon Company acquired the assets of the Liberty Carbon Company, constituted a reorganization and nontaxable exchange within the meaning of § 203 of the Revenue Act of 1926, Ch. 27, 44 Stat. 9, 26 U.S.C.A.Int.Rev. Acts, page 148, and therefore the basis of the preferred stock received by the taxpayer in 1925 and redeemed in 1934, was the allocated cost of the property exchanged therefor, by reason of the provisions of § 113(a) (6) of the Revenue Act of 1932, Ch. 209, 47 Stat. 169, 26 U.S. C.A.Int.Rev.Acts, page 515, and § 113(a) (12) of the Revenue Act of 1934, Ch. 277, 48 Stat. 6S0, 26 U.S.C.A.Int.Rev.Acts, page 700. The taxpayer challenges this theory, but not the computation of the tax, if the theory is sound.
The relevant provisions of § 203 of the Revenue Act of 1926 are as follows:
§ 203 (a) “Upon the sale or exchange of property the entire amount of the gain or loss, determined under section 202, shall be recognized, except as hereinafter provided in this section.”
§ 203 (b) (3) “No gain or loss shall be recognized if a corporation a party to a reorganization exchanges property, in pursuance of the plan of reorganization, solely for stock or securities in another corporation a party to the reorganization.”
§ 203 (h) (1) (A) “The term ‘reorganization’ means a merger or consolidation (including the acquisition by one corporation of at least a majority of the voting stock and at least a majority of the total number of shares of all other classes of stock of another corporation, or substantially all the properties of another corporation).”
The facts with regard to the formation of the United Carbon Company and the transfer to it of the assets of the Liberty Carbon Company and other like business organizations in 1925 were found by the Board of Tax Appeals as follows:
“In that year, the Liberty Carbon Co., along with 11 other corporations and a partnership, transferred specific properties and inventories to United Carbon Co., in exchange for preferred and common stock, and cash.
“At the time of that exchange the transferred assets of Liberty Carbon Co. had a total original cost of $318,873.40. The cost of such of these assets as were transferred in exchange for United Carbon Co.’s stock was $213,856.02, but at the time of the exchange, these assets had a fair market value of $256,293.92. Such cost of assets not transferred for stock was $105,017.38, of which $79,539.43 covered inventory. For the purposes of the transaction, this inventory was taken at cost and United Carbon Co. paid Liberty Carbon Co. $79,539.43 in cash, for it.
“The stock received by Liberty Carbon Co. in exchange for that part of its assets which aggregated $256,293.92 in market value on the day of the transfer, as above set forth, consisted of 1,506 shares of $100.00 par value preferred and 6,024' shares of no par common stock of United Carbon Co. All these transfers were effectuated as a part of a plan of reorganization, to bring together, in one organization, the assets of various corporations engaged in the manufacture of carbon black, United Carbon Co. having been organized under the laws of Delaware to acquire the assets of the various concerns in pursuance of the plan.
“Thereafter, the Liberty Carbon Co. was dissolved, and petitioner, being a stockholder, received a liquidating distribution of 72 shares of the preferred stock of United Carbon Co. and 288 shares of its common stock. At the time of the exchange between Liberty Carbon Co. and United Carbon Co., the preferred stock received by petitioner had a fair market value of $7200.00 and, based upon -the Liberty Carbon Co. stock exchanged therefor, an allocated value of $3,485.67.
“Petitioner reported ho taxable profit in his income tax returns for 1925 as a result of the exchange of stock of the Liberty Carbon Co. for stock of the United Carbon Co., nor was any information relative to the transaction set forth in the return.”
The ultimate undisputed findings of the Board were that the Liberty Carbon Company transferred 92 per cent, i. e., “substantially all” of its assets, to the United Carbon Company for stock and cash; and that the stock received in the exchange represented 73 per cent, i. e., a “material” part of the value of the transferred assets. These facts being established, the conclusion that a statutory reorganization took place is inevitable. The taxpayer received the United Carbon Company stock within the meaning of § 203(b) (3) as the result of a transaction in which the Liberty Carbon Company, a party to a reorganization, exchanged property “in pursuance of the plan of reorganization, solely for stock or securities” in United Carbon Company “another corporation a party to the reorganization”. The term “reorganization” as defined, ,hr § 203(h) (1) (A) is satisfied by a merger or consolidation in which there is an acquisition by one corporation of substantially all the property of another. This conclusion is supported by decisions of the Supreme Court in Nelson Co. v. Helvering, 296 U.S. 374, 375, 56 S.Ct. 273, 80 L.Ed. 821; Helvering v. Minnesota Tea Co., 296 U.S. 378, 56 S.Ct. 269, 80 L.Ed. 284; G. & K. Mfg. Co. v. Helvering, 296 U.S. 389, 56 S.Ct. 276, 80 L.Ed. 291. These decisions are summed up by the Supreme Court in LeTulle v. Scofield, 308 U.S. 415, 420, 60 S.Ct. 313, 315, 84 L.Ed. 355, as follows: “We have held that where the consideration consists of cash and short term notes the transfer does not amount to a reorganization within the true meaning of the statute, but is a sale upon which gain or loss must be reckoned. We have said that the statute was not satisfied unless the transferor retained a substantial stake in the enterprise and such a stake was thought to be retained where a large proportion of the consideration was in common stock of the transferee, or where the transferor took cash and the entire issue of preferred stock of the transferee corporation. And, where the consideration is represented by a substantial proportion of stock, and the balance in bonds, the total consideration received is exempt from tax under Sec. 112 (b) (4) and 112(g).”
From the facts in the pending case outlined above, it is clear that the consideration for the transfer did not consist merely of cash or evidences of indebtedness, but was represented by a substantial proportion of preferred and common stock in the transferee corporation, so that the transferor retained a substantial stake in the new enterprise.
The chief reliance of the taxpayer in the pending case is the prior decision of this court in United Carbon Co. v. Commissioner, 90 F.2d 43, in which the same transactions relating to the formation of the United Carbon Company and its acquisition of the assets of the Liberty Carbon Company and other corporations were considered. We were called upon in that case to decide the proper basis to be used by the United Carbon Company for the computation of depletion and obsolescence of the assets acquired by it from the trans-ferors. We pointed out that under § 204 (c) of the Revenue Act of 1926, 26 U.S. C.A.Int.Rev.Acts, page 154, the basis upon which depletion and obsolescence are to be allowed in respect to property is the same as that provided for determining gain or loss upon the sale or disposition thereof, and we held that the basis to be applied by the United Carbon Company was the fair market value of the transferred property at the time of acquisition and not the cost of the assets to the transferors. The implication from the decision was that the gain upon the transfer of the assets to the United Carbon Company was taxable and did not fall within the excepting provisions of § 203. Consequently the taxpayer says that this court has already decided the present controversy in his favor by holding in effect that the transaction did not constitute a statutory reorganization, and that the consideration received by the Liberty Carbon Company was the equivalent of cash.
It should be noticed first that the principle of res adjudicata may not be invoked because the parties before the court at this time are not the same as those who were in the former case. Moreover, our prior decision was limited to a single point, and we expressed no opinion as to the applicability of § 203(b) (3) upon which the Commissioner now relies. In the former case the argument of the parties was directed and limited to § 203 (b) (4) and § 204(a) (8). § 203(b) (4) is as follows: “No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock or securities in such corporation, and immediately after the exchange such person or persons are in control of the corporation; but in the case of an exchange by two or more persons this paragraph shall apply only if the amount of the stock and securities received by each is substantially in proportion to his interest in the property prior to the exchange.”
Section 204 (a) (8) merely provides that if the transaction comes within § 203 (b) (4) the basis for determining gain or loss on the sale or disposition of property shall be the same for the transferee as it would be in the hands of the transferor. We held that § 203 (b) (4) was not applicable because the amount of stock received by each of the transferors was not substantially in proportion to his interest in the property prior to the exchange. Our attention was not directed to § 203(b) (3) and we made no ruling upon its applicability to the facts.
It is obvious that § 203 contemplates that no gain or loss shall be recognized for taxation purposes in a number of different contingencies that are separately described in the several subsections, and that a given transaction may fall outside the terms of one sub-section and yet satisfy the terms of another. This view is illustrated by the Supreme Court in Nelson Co. v. Helvering, supra, (296 U.S. at page 377, 56 S.Ct. 273, 80 L.Ed. 821) where the court pointed out that a statutory reorganization may occur under the terms of § 203(h) (1) (A), although the transferor does not acquire a controlling interest in the transferee as is provided in § 203(h) (2); and again in Helvering v. Minnesota Tea Co., supra, (296 U.S. at page 384, 56 S.Ct. 269, 80 L.Ed. 284) where the court pointed out that a taxpayer may find relief under Clause A of 203(h) (1), although Clause B may not be applicable to his case.
That is the situation in the present case. § 203(b) (4) is inapplicable for the reasons stated in our former decision; but § 203(b) (3) correctly describes the transaction. Such would have been our decision in the prior case had the Commissioner not based his contention entirely upon a sub-section that did not lit the facts.
It is true that if the consideration received by the Liberty Carbon Company had been the equivalent of cash, none of the exceptions contained in § 203 would have been applicable; but our holding that one of these exceptions was inapplicable did not imply that only the equivalent of cash had been received. Nor do we think that the taxpayer correctly interprets § 203 when he contends that if two or more transferors are engaged in the transactions referred to in § 203, the only applicable sub-section is § 203(b) (4); and therefore, in such an event, there can be no statutory reorganization under § 203 (b) (2) or § 203(b) (3) unless the trans-ferors receive amounts of stock proportionate to their interests in the property transferred. Such a construction would unduly restrict the meaning of the statute and run counter to the decisions of the Supreme Court. Nothing in our former opinion justifies such an interpretation.
Since the transaction under consideration in the present case falls within the terms of § 203(b) (3), no gain or loss was recognizable at the time of the transfer in 1925; and the basis for computing the gain of the taxpayer in 1934 is the cost of his allocable share of the assets of the Liberty Carbon Company. This was indeed the attitude that the taxpayer himself assumed in regard to the transaction in 1925, because he made no report in his tax return for that year of gain from the acquisition of the stock of the United Carbon Company.
The decision of the Board of Tax Appeals is therefore affirmed.
Question: What is the nature of the first listed appellant?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_numappel
|
2
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Your specific task is to determine the total number of appellants in the case. If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
ATLANTIC & GREAT LAKES STEAMSHIP CORP., Plaintiff-Appellee, v. STEELMET, INC., Defendant, and Tidewater Terminals, Inc., Defendant-Appellant.
No. 45, Docket 77-7131.
United States Court of Appeals, Second Circuit.
Argued Sept. 28, 1977.
Decided Nov. 21, 1977.
Richard E. Repetto, New York City (Donovan, Maloof, Walsh & Kennedy, New York City, on the brief), for plaintiff-appel-lee.
Donald F. Mooney, New York City (Eugene J. O’Connor, Jr., New York City, on the brief), for defendant-appellant.
Before LUMBARD, MOORE and FEIN-BERG, Circuit Judges.
LUMBARD, Circuit Judge:
Tidewater Terminals, Inc. appeals from a judgment of the Southern District which found it liable to plaintiff Atlantic & Great Lakes Steamship Corp. (AGL) for breach of a charter agreement between the two, under which Tidewater contracted to charter the M.V. Mary from AGL, the time-charter owner of the vessel. On appeal, Tidewater makes three arguments: that there was no meeting of the minds giving rise to contractual liability; that certain conditions precedent were never fulfilled and consequently the contract never became binding; and that AGL suffered no damages from the aborted charter agreement. We reject each of these claims.
Tidewater is a subsidiary of Steelmet, Inc. In the fall of 1974, another Steelmet subsidiary, Steelmet Export Corp., contracted to sell 9,375 long tons of shredded scrap metal to Empresa Siderugica Del Peru (Sid-er), a Peruvian corporation. Under the terms of this contract, Steelmet Export undertook to secure and load the scrap at Jacksonville, Florida, for shipment to Peru; Sider agreed to pay for the unloading of the cargo in Peru. In order to fulfill its affiliate’s obligations, Tidewater, acting through its broker (Antra), entered into negotiations with AGL’s broker (Burbank) concerning a charter for the Mary. These negotiations culminated in a cable, set forth in the margin, sent from Ivar Traa of Antra to Arild Pettersen of Burbank at 7:25 p. m. on November 20, 1974. In the telex, the Mary is identified as the subject of the charter, dates are specified for arrival at Jacksonville and travel to Peru, and the cargo is designated. Further, the cable plainly states that the charter agreement is subject to the receiver’s (Sider’s) approval of the vessel by 4:00 p. m., November 21,1974 and is governed by the terms set forth in a form contract used in the industry and known as “Genjapscrap,” subject to details.
The day following receipt of the telex (November 21), Pettersen received from Traa a copy of a Genjapscrap contract used by Tidewater on a previous charter with details included. Pettersen subsequently notified Traa that AGL had no objection to the form, although certain details were lacking.
When the receiver’s approval was not immediately forthcoming, AGL extended the deadline by twenty-four hours to November 22 at 4:00 p. m. On November 21 and 22, two Sider representatives (Cesar Molina and Javier Zegarra Zavaleta) met with Robert Waisfisz, a vice president of Steelmet, and Andreas Avraamides, charter manager for Tidewater and export manager for Steelmet Export. During these meetings, Avraamides described the Mary to the Sider representatives, and also offered for their use an alternative ship, the Promethee. Because it had the ship on its own time charter, Tidewater could save substantial costs by using the Promethee for the Sider delivery, provided it could avoid obligation under the contract with AGL. . Although it appears that the Promethee possessed certain other advantages over the older Mary, the Sider people were primarily concerned with the comparative arrival time of the two ships. Accordingly, they expressed a preference for the Promethee, upon Av-raamides’ representations that it was likely to arrive in Jacksonville before the Mary and that the Mary required a special insurance premium because of its age.
On November 22, the preference of the Sider representative was communicated to Traa and, sometime thereafter, to Pettersen and his principal, AGL. In the meantime, however, on November 24, AGL had cabled its agents in Peru inquiring into the status of Sider’s approval. On the 26th, AGL’s agents replied that Sider had refused to intervene in any way in the fixture of the vessel — either to approve or disapprove its use for the contract. Also on November 26, Avraamides cabled Sider asking for a written confirmation of its acceptance of the Promethee. Sider responded by cable on the 28th that under its contract with Steel-met Export it had no authority whatsoever to “decide on the vessel which will carry the material.”
The Promethee subsequently carried the scrap to Peru at the instruction of Tidewater, and AGL attempted to mitigate its injury by securing another charter for the Mary. These attempts were not wholly successful, however, and the court below found that AGL sustained $62,746.55 in damages from the breach of the contract.
Judge Metzner held Tidewater liable for breach of the charter party. He found that all the essential terms of the charter were set forth or referred to in the November 20 telex, and that Sider would have given its approval as required by the telex, had Tidewater asked it to do so. As he further found that Tidewater for its own reasons had deliberately failed to get Sider’s approval, he concluded that Tidewater was liable for the breach. The trial court’s findings of fact support these conclusions and the record shows that they are not clearly erroneous.
The record shows that Sider left to Tidewater the decision as to which vessel to charter. Sider did not know that Tidewater itself was the time charterer of the Promethee and had already chartered the Promethee, on November 22, to Steelmet Export to carry the cargo of scrap.
As Judge Metzner found, the reasons advanced by Tidewater for choosing the Pro-methee over the Mary were contrary to fact. The insurance penalty because of the Mary’s age could not have mattered as that was for the account of the vessel owner, as shown by the charter form. As for the assertion that the Promethee could be loaded earlier in Jacksonville, Avraamides could not have known at the time which vessel would arrive first in Jacksonville. Moreover, Antra’s notification to Burbank that Sider refused to accept the Mary because of its age was untrue. In sum, there is ample support in the record for the conclusion that Tidewater wanted the business for itself, unbeknown to Sider, and deliberately chose not to ask Sider’s approval of the Mary, but instead arranged for Sider to use the Pro-methee.
We agree, therefore, with Judge Metzner’s conclusion that the condition precedent of Sider’s approval was excused by Tidewater’s bad faith failure to make any effort whatever to secure Sider’s approval, an approval which would have been immediately forthcoming, in light of all the circumstances. See 2 A. Corbin, Contracts § 310, at 112 (1950); 5 W. Jaeger, Williston on Contracts § 677, at 225 (1961).
Lastly, the appellant takes issue with the district court’s calculation of damages. According to Tidewater, AGL, far from losing $62,746.55 by its failure to carry the scrap to Peru, actually saved itself from a $70,907.20 loss. Judge Metzner’s opinion states that he reviewed the computations in AGL’s post trial brief and that the evidence supported the plaintiff’s claim for damages of $62,746.55. Moreover, Judge Metzner specifically found that the contract ended with the unloading in Peru and he therefore rejected the defendants’ claim that costs of the ship returning empty from Peru were properly deductible from any hypothetical profit the plaintiff would have received. The calculations referred to indicated that the net revenue AGL would have received under the contract was $263,935.55. Expenses shown in the plaintiff’s post trial brief include: $147,000 which AGL paid for its time charter of the Mary for the time in question; $35,600 for fuel that would have been consumed on the voyage; $13,000 estimated port charges; and $5,589 for the extra insurance AGL would have had to pay under the terms of the charter. Thus, AGL argued, and Judge Metzner found, that $62,746.55 represents a reasonable estimate of the profit AGL would have made but for Tidewater’s breach. The record supports these findings of damage; we cannot say they are clearly erroneous.
Affirmed.
. WE CONFIRM HAVING FIXED TODAY AS FOLLOWS ACC TIDEWATER TERMINALS INC MV MARY GREEK FLAG BLT 57 14783 DWAT
GLESS ORECARRIER, BRIDGE BETWEEN HATCHES 2 AND 3, ENG AFT
5 HOLDS/HATCHES BUT CARGO ONLY TO BE LOADED IN HATCHES 2-5
9375 LT MINMAX SHREDDED SCRAP STOWING MAX 40/LT
I SB JACKSONVILLE/1 SB CHIMBOTE NOV 27/DEC 9 (PRESENT ETA NOV 28)
2500 LT LOAD/800 LT DISCH ALL PER WWDSHEX EIU
US 29, 25 PER LT FIOT, 95 PCT PPD 4500 DEM/ [¶] LTS
NEGOTIATIONS AND EVENTUAL FIXTURE TO BE KEPT STRICTLY CONFIDENTIAL
SUB RECEIVERS APPR OF VESSEL LATEST 1600 HOURS NOV 21
OWISE GENJAPSCRAP SUB DETS 3,75 TTL HERE (A. 148a, 150a).
. “Genjapscrap,” is a standard form contract often used when chartering a vessel for shipping scrap metal. Its name apparently comes from its use in the shipment of scrap to and from Japan.
. Tidewater also contends that as the telex read “sub dets” it did not set forth all the essential details because additional details remained to be agreed upon. The record does not indicate, however, that there were any details of substance not covered by the telex.
Question: What is the total number of appellants in the case? Answer with a number.
Answer:
|
songer_casetyp1_7-2
|
E
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation".
UNITED STATES ex rel. FLETCHER v. FAHEY et al.
No. 7568.
United States Court of Appeals for the District of Columbia.
Argued Dec. 12, 1940.
Decided Feb. 24, 1941.
Petition for Rehearing Denied March 19, 1941.
Motion to Vacate Opinion and Judgment Denied April 10, 1941.
Edmond C. Fletcher, of Washington, D. C., pro se.
Harvey D. Jacob and E. K. Neumann, both of Washington, D. G, for appellees.
Before GRONER, Chief Justice, and LUHRING and O’DONOGHUE, United States District Judges sitting by assignment.
GRONER, C. J.
R.S. § 5438 made it a crime to present false claims against the United States, and by the terms of R.S. §§ 3490, 3491, and 3493, any person may institute an action in a District Court, on behalf of the United States, against the wrongdoer, to recover a penalty and double the damages sustained, one half of which the informer may keep for himself.
Appellant brought this action in the court below against John H. Fahey and others, who at the time in question were either members or executive officers of the Federal Home Loan Bank Board, to recover 400 million dollars, plus a penalty of $34,-000, because of their acts in the following circumstances. § 4(a) of The Home Owners’ Loan Act of 1933, authorized and directed the Federal Home Loan Bank Board “to create a corporation to be known as the Home Owners’ Loan Corporation, * * * which shall have authority to sue and to be sued in any court of competent jurisdiction, Federal or State”. The complaint charges that certain of the defendants, acting as members of the Board, “misconceiving themselves to be a Sovereign power, from which all corporate franchises flow, spread upon the records of said Board” a paper purporting to be a charter of the Home Owners’ Loan Corporation; that their action in this respect was beyond any power committed to them by the Act or by any statute of the United States; that, having taken this illegal action, they then transmitted to the Secretary of the Treasury a copy of the resolution, represented to him that the corporation was a bona fide and existing body corporate with a capital stock of 200 million dollars, called on him to subscribe on behalf of the United States for all of “such purported capital stock of said pretended corporation”, and demanded and received from the Treasury of the United States from time to time various sums of money aggregating 200 millions in payment for the stock.
This brief narrative is sufficient to show that the purpose of the suit is to recover on behalf of the United States double the amount of money paid for stock of the Home Owners’ Loan Corporation, on the theory that there is no such legal corporation and that the money had been secured by the false and fictitious claim of the defendants that the corporation had been properly and legally incorporated. The trial court dismissed the complaint on the authority of Fletcher v. Jones, 70 App.D.C. 179, 105 F.2d 58, certiorari denied 308 U.S. 555, 60 S.Ct. 116, 84 L.Ed. 467.
In this court appellant contends that it takes the act of a sovereign power to create a corporation, that the statute does not authorize the Board to issue a charter, and that the Board could create the Home Owners’ Loan Corporation only by obtaining a charter from the District of Columbia or some state.
We find no merit in the contention and think the lower court was quite correct in holding the case controlled hy the Jones decision. There the same plaintiff as here sought to recover possession of realty on a resulting trust, on the ground that the beneficiary in a deed of trust was the Home Owners’ Loan Corporation, which it was alleged did not exist. We examined the statute and held that Home Owners’ Loan Corporation had been properly organized according to law and had complete corporate existence. We now adhere to all that we said there.
Appellant also argues that the complaint could not be “dismissed” without the written consent of the judge and of the United States Attorney, required by R.S. § 3491 before actions of this nature, once filed, may be “withdrawn or discontinued”. This point, too, we think without merit. The action of the court was on a motion to dismiss for failure to state a cause of action. This was a proper defense, and the prohibitions of the statute were intended to reach a wholly different situation.
Affirmed.
Now reproduced in amended form in 18 U.S.C.A. § 80, cf. United States ex rel. Kessler v. Mercur Corp., 2 Cir., 83 F.2d 178, certiorari denied 299 U.S. 576, 57 S.Ct. 40, 81 L.Ed. 424.
31 U.S.C.A. §§ 231, 232, 234.
48 Stat. 129, 12 U.S.C.A. § 1463(a).
Question: What is the specific issue in the case within the general category of "economic activity and regulation"?
A. taxes, patents, copyright
B. torts
C. commercial disputes
D. bankruptcy, antitrust, securities
E. misc economic regulation and benefits
F. property disputes
G. other
Answer:
|
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